Biennial report of the Attorney-General of the State of North Carolina

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THE LIBRARY OF THE
UNIVERSITY OF
NORTH CAROLINA
THE COLLECTION OF
NORTH CAROLINIANA
C3U0
N87a
1968-70
UNIVERSITY OF N.C. AT CHAPEL HILL
00033947105
FOR USE ONLY IN
THE NORTH CAROLINA COLLECTION
Farm No. A-.?68
n
Digitized by the Internet Archive
in 2011 with funding from
Ensuring Democracy through Digital Access (NC-LSTA)
http://www.archive.org/details/biennialrep1968attrny1970
NORTH CAROLINA
ATTORNEY GENERAL REPORTS
Volume 40
Robert morgan
attorney general
BIENNIAL REPORT
AND
OPINIONS
OF THE
ATTORNEY GENERAL
STATE OF NORTH CAROLINA
VOLUME 40
1968-1970
ROBERT MORGAN
Attorney General
LETTER OF TRANSMITTAL
31 December 1970
To his Excellency
Robert Scott, Governor
Raleigh, North Carolina
Dear Governor Scott
:
In compliance with Article III, Section 7 of the Constitution,
I herewith submit the report of the Attorney General for the
biennium 1968-1970.
Respectfully yours,
Robert Morgan
AMorney General
11
LIST OF ATTORNEY STAFF MEMBERS
ROBERT MORGAN
Attorney General
Harry W. McGalliard
Chief Deputy Attorney General
Jean A. Benoy
James F. Bullock
Harrison Lewis*
Ralph Moody
Robert Bruce White, Jr.
Deputy Attorneys General
Carroll Leggett
Special Assistant Attorney General
H. H. Weaver
Special Assistant
Myron Banks
William F. Briley
t. buie costen
Christine Y. Denson
Sidney S. Eagles, Jr.
George Goodwyn*
Robert Gunn*
Eugene Hafer
Guy a. Hamlin
Bernard Harrell*
Claude W. Harris
Charles M. Hensey
I. B. Hudson
Parks Icenhour
I. Beverly Lake, Jr.
Andrew H. McDaniel
William W. Melvin
William B. Ray
Millard R. Rich, Jr.
H. T. Rosser
Jacob Safron
Eugene A. Smith
Andrew A. Vanore, Jr.
Robert Weathers
Robert G. Webb
Thomas B. Wood
Assistant Attorneys General
Tom Kane, Ocean Law Consultant
James L. Blackburn
Lester Chalmers
Philip Covington
Edward Eatman
P. Andrew Giles
Ladson Hart
Maurice W. Horne*
Don Jacobs
Rafford Jones
Charles A. Lloyd
James Magner
BuRLEY Mitchell, Jr.
Bruce Morton*
Carlos Murray*
Fred Parker III*
Howard B. Satisky
Dale Shepherd*
Charles Wilkinson*
Richard League
Trial, Staff and Real Property Attorneys
Russell G. Walker, Jr.
Assistant Revisor of Statutes
*No longer on the staff.
Ill
TABLE OF CONTENTS
Letter of Transmittal ii
List of Attorney Staff Members iii
Summary of Activities v
Opinions of the Attorney General 1
Index to Opinions 896
ly
SUMMARY OF ACTIVITIES
This Office continues to act in its traditional role as legal counsel for
approximately 300 State departments and institutions, involving a wide
variety of work in litigation, appellate work, formal and informal opinions
and other legal services. Legislation creating several new departments or
boards and legislation expanding powers of existing departments passed
by the 1969 General Assembly has resulted in an increased work load.
The number of civil rights cases against State and local government
officers and cases challenging the constitutionality of State statutes in State
and federal courts has increased substantially during the biennium. The in-crease
in the number of cases coupled with the more active participation
by this Office in these cases because of State interest or because counsel is
being associated less in such cases results in a distribution of these cases
among several members of the staff.
The Office has also prepared for and participated in 37 HEW hearings
in less than a year and approximately ten court actions on school desegre-gation
matters dealing with the various local school systems in the State.
In addition, the Office is consulted and acts in an advisory role for at-torneys
for local school units in related matters.
The Attorney General continues his involvement in charitable trust
cases in State and federal courts.
The prime function of the Highway Division of the Department of
Justice is to represent the State Highway Commission in all legal matters
arising from all of its functions. During the biennium the State Highway
Commission awarded contracts in the total amount of $273,000,000.00. All
of these contracts are reviewed and approved as to form and legality by
attorneys in the Highway Division.
Probably the most important duty of the members of the Highway
Division is to represent the State of North Carolina in all condemnation
actions brought for the acquisition of land for the construction or improving
of highways within the State of North Carolina. On July 1, 1968, there
were a total of 1,346 of these cases pending in the various Superior Courts
in North Carolina. During the biennium a total of 852 new condemnation
actions were filed making a total of 2,198 cases in Superior Court involving
the acquisition of land for the building or improving of highways.
During the biennium a total of 960 cases pending in Superior Court
were settled and a total of 138 cases were tried before juries by attorneys
with the Highway Division. At the close of the biennium on June 30, 1970,
there remained pending, in the Superior Courts a total of 1,100 condemna-tion
suits. Thus it is seen that while a total of 852 new cases were filed, a
total of 1,098 cases were closed either by settlement or by trial during the
biennium. In the 1,100 pending actions the Highway Commission has ap-praised
the value of the land taken and damage to remainder at approxi-mately
$10,000,000.00. Based on past experience, it can be anticipated that
the landowners will claim damages in the amount of $40,000,000.00 in
these cases.
The Attorney General appointed a 22-member ad hoc Criminal Code
Revision Committee to consider the scope and feasibility of a proposed
revision of North Carolina's criminal law and procedure. Meeting on a
monthly basis, the Committee submitted its final report to the Attorney
General on June 30, 1970.
The Committee's recommendations call for early appointment of a
Criminal Code Revision Commission and commencement of a review,
analysis and, where necessary, revision of the State's criminal law.
Criminal appeals and habeas corpus actions in State and federal courts
have increased materially during the biennium. For example, it was found
that in the Middle District of North Carolina alone, federal habeas corpus
petitions increased from only 4 in 1963 to 39 in 1966 to 65 in 1968 to 82
in 1969. In the calendar year 1969 a total of 262 habeas corpus petitions
filed by State prisoners in federal court required handling by this Office.
In the State courts during 1969, 491 petitions for writ of habeas corpus or
review of post conviction hearings and other such matters were filed in
the North Carolina Court of Appeals and approximately 30 were filed in
the Supreme Court. If the petition is granted in these cases, the State of
course is required to file briefs. In answering the petition, however, it is
usually necessary to read a prisoner's record and sometimes a several
hundred page trial transcript.
Our traditional role in extraditions (assisting the Governor and the
demanding state) has been continued with approximately 50 cases handled
each year. In addition, the Office has taken on a new advisory role to the
Governor in assisting with some extradition matters where North Carolina
is the demanding state.
The Consumer Protection Division of the Office has actively partici-pated
in the liability insurance rate case, the Southern Bell Telephone rate
case, the Lee Telephone rate case, the Seaboard Mobile Agency concept
hearing, the Carolina Power and Light Company rate case, the Duke Power
Company rate case, several Interstate Commerce Commission rate cases
and two cases before the Federal Power Commission. The Division has re-ceived
approximately 2,150 complaints and inquiries in a little more than
a year's period which it has handled with correspondence and investigation.
The Division has obtained 4 restraining orders and filed one criminal case
against multiple defendants in the consumer protection area.
Approximately 2,500 bills were drafted for the 1969 General Assembly,
some of which involved multiple drafts or substantial pieces of research
in drafting.
Further editorial responsibilities with regard to publication of the
General Statutes have been undertaken. Several recompiled volumes of the
statutes have been published. Attorney General opinions are now carrying
annotations to the statutes and an interim annotation supplement to the
Statutes is being published for the first time.
The tort and workmen's compensation section of the Office has a sub-stantial
number of cases which are settled or involve hearings in the
Industrial Commission or superior court. The Office handles approximately
100 workmen's compensation hearings each year, several hundred claims
for damage to State vehicles or property, approximately 375 Travelers
cases, claims against the State for vehicular liability, approximately 700
claims per year arising out of school bus accidents and approximately
300 other tort claims against the State per year.
vi
Office staff act as collection attorneys on accounts receivable for all
State institutions and agencies. Figures are not available to indicate the
total amount collected on student loans, etc., but it is known to be sub-stantial.
Although opinions by the Attorney General to State and local govern-ment
officials require only a small part of staff time, the variety of legal
services and the increased activity of the Office were reflected in the
opinions—carried in full text—which follow.
Vll
ATTORNEY GENERAL OPINIONS
ABC ACT
26 March 1970
Subject: ABC Act; Advertising' Beer and Wine; Power of State
Board of Alcoholic Control to Regulate
Requested by: Mr. Lee P. Phillips, Director of Enforcement
State Board of Alcoholic Control
Question: Does the State Board of Alcoholic Control have the au-thority
to regulate advertising of wine and malt beverages
in the State of North Carolina ?
Conclusion: Pursuant to the provisions of 18-78 (d), the State Board of
Alcoholic Control has the power to adopt such reasonable
rules and regulations as they deem necessary regarding
the advertising of wine and malt beverages within the
State of North Carolina.
The inquiry dated March 16 indicates that a Statesville firm which pro-duces
litter receptacles which carry small advertisements has requested of
the State Board of Alcoholic Control an opinion as to whether they may
carry advertisements for wine and malt beverage wholesalers and retailers
in the State of North Carolina on their signs. A further opinion was re-quested
as to whether the State Board would have the discretionary right
to make reasonable rules and regulations regarding such advertising.
G.S. 18-78(d) provides in part:
"The State Board of Alcoholic Control shall have the power to
adopt, repeal and amend rules and regulations to carry out the
provisions of this article and to govern the distribution, merchan-dising
and advertising of wine and malt beverages . . . ."
The statute quoted above clearly gives the Board of Alcoholic Control the
authority to enact rules and regulations dealing with the advertising of
wine and malt beverages. This is not affected, of course, by the exclusionary
provisions in G.S. 18-3 and G.S. 18-52 through 18-55 and 18-60 which
clearly make those advertising regulatory provisions applicable only to
alcoholic beverages with an alcohol content of not more than 3.2% and
14% respectively. Any regulation which the Board might pass could not
override the provisions of G.S. 18-52.
Numerous states have upheld the authority of statutes, local ordinances
or regulations enacted upon proper statutory authority which would regu-late
advertising of alcoholic beverages within the borders of a particular
state. (See Fletcher v Paige, 124 Mont. 114, 220 P.2d 484, 19 A.L.R. 2d
1108 (1950) and the annotation in 19 A.L.R. 2d at p. 1114.) Further, it is
stated in 45 Am. Jur. 2d, Intoxicating Liquors, §236:
"While the manufacture and sale of intoxicating liquors, where
permitted, is a lawful business which is fully entitled to pro-tection,
it is nevertheless regarded as dangerous to public health,
2 ATTORNEY GENERAL OPINIONS [VOL.
safety and morals, and is thus subject to strict regualtion or
control by the states under their police power, which has generally
been held to include the prohibition or regulation of advertising."
(p. 649) V •
The cases in the A.L.R. annotation and in the Am. Jur. note clearly indicate
that a majority of jurisdictions uphold the power of such regulation. Since
our Supreme Court has already indicated that the regulation of alcoholic
beverages is well within the police power of the State {Boyd v Allen, 246
N.C. 150, 97 S.E.2d 864 (1957)), adoption of such regulations by the Board
would be proper. ,
Of course, like any other regulations, they must be reasonable in basis and
if the Board would undertake rather than to outright prohibit advertising
of beer and wine, to select among locations, types of advertising, etc., any
distinctions as to classification of location, types of ad, etc., would have to
be a reasonable classification.
Since the statute allows the Board to make regulations regarding adver-tising,
we were not confronted specifically with the question of whether
these small posters attached to litter cans are billboards or not. Since the
statute deals with "advertising", these posters would clearly come within
the Board's power. It was noted in passing that the few decisions in other
jurisdictions would not seem to apply in the present case to factually
distinguish these small billboards from the large ones.
In summary, the Board has the power reasonably to pass regulations which
would regulate the advertising of beer and wine in the State of North
Carolina and as long as such regulations are reasonable in basis and not
founded on unreasonably arbitrary classifications of location and type of
advertisement and such other classifications as the Board would deem
necessary, such regulations would be valid.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
(Mrs.) Christine Y. Denson,
. Staff Attorney
2 June 1970
Subject: ABC Act; Alcoholic Beverages Defined; Consumption of
Beer on Street Under G.S. 18-51(6)
Requested by: Mr. Norman T. Gibson
Hamlet Town Attorney
Question: Does the term "alcoholic beverages" as used in G.S.
18-51(6) make it unlawful to drink beer on the public
streets of a municipality ?
Conclusion: No.
40] ATTORNEY GENERAL OPINIONS
The term "alcoholic beverages" as used in G.S. 18-51(6), is defined in
G.S. 18-60 to mean alcoholic beverages of any and all kinds which shall
contain more than 14% of alcohol by volume, and does not apply to or
regulate the possession, sale, manufacture or transportation of beer, wines
or ales having a lower alcoholic content.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
3 June 1970
Subject: ABC Act; Beer; Sale, What Constitutes; Power of State
Board of Alcoholic Control to Regulate
Requested by: Mr. Lee P. Phillips
Director of Enforcement
State Board of Alcoholic Control
Questions: (1) Is it a violation of the provisions of Chapter 18 of the
General Statutes for a person operating a commercial
establishment and possessing an on-premises beer permit
to have a door or cover charge per person and then serve
beer to his customers "without charge" ?
(2) Is it a violation of the provisions of Chapter 18 of the
General Statutes for a person or corporation not possessing
an on-premises beer permit to possess beer in the estab-lishment
and give it to customers "without charge"?
Conclusions: (1) It is not a violation of the provisions of Chapter 18
of the General Statutes for a person operating a com-mercial
establishment and possessing an on-premises beer
permit to have a door or cover charge per person and then
serve beer to his customers "without charge".
(2) Whether it is a violation of the provisions of Chapter
18 of the General Statutes for a person or corporation not
possessing an on-premises beer permit to possess beer in
the establishment and give it to customers "without charge"
depends on the factual situation. A sale of beer may be
indirect as well as direct and if the price of the beverage
is hidden in some cover charge, attendance fee, or charge
for some other facility, there would be a sale of beer in
violation of Chapter 18 for failure to possess a permit.
The inquiry of May 20 does not give sufficient facts to determine with any
degree of accuracy the answers to the questions posed in the light of any
specific factual situation.
G.S. 18-64 defines "sale" as "a transfer, trade, exchange or barter in any
manner or by any means whatsoever, for consideration." Thus, one would
have the sale of beer in this context if it could be proven that by some
ATTORNEY GENERAL OPINIONS [Vol.
other charge or fee such as a cover charge for a club, increased meal price
at Br restaurant, greens fee, attendance fee or participation fee for a golf
tournament, or any other charge or fee which evidently was increased in
order to provide "free" beer, there would be a sale for which the establish-ment
would have to possess a permit. For those establishments which do
possess a permit, the fact that the sale was an indirect one would not be a
violation of the law since the permit by its terms authorizes them to
possess beer for the purposes of sale. (Of course, this assumes that the
sale was not to a minor, to a person in an intoxicated condition, or in
violation of an on-premises or off-premises restriction.)
However, where there is no permit for the establishment and it is evident
that there is a charge or a fee in connection with a customer's activities at
the establishment which clearly would cover the cost of the "free" beer,
although such cost is not directly attributed to the consumption of beer,
there would be a sale in violation of G.S. 18-64 in that some consideration
would be provided. Of course, the prima facie presumption of possession
for purchase of sale would be available to the State in these circumstances
so that it would be incumbent upon the establishment to prove that in fact
they were not selling, either directly or indirectly, the beer in violation of
the provisions of Chapter 18.
Robert Morgan, Attorney General
. (Mrs.) Christine Y. Denson,
Staff Attorney
8 July 1969
Subject:
Requested by:
Question:
Conclusion:
ABC Act; Beer and Wine; Elections, Circulation of Peti-tion
and Return Within 90 Days; Discretion of County
Board of Elections to Extend Time
Mr. Homer Haywood, Chairman
Montgomery Board of Elections
Where a petition for a beer and wine election has been
circulated and returned within 90 days to the county board
of elections as required by G.S. 18-124(d), but the petition
was not circulated fully during such period by the pro-ponents
at the request of the county board, may the county
board of elections extend the time for circulating the peti-tion
for an additional period of 30 days ?
Although the language of G.S. 18-124 (d) appears to be
mandatory, it appears that the Supreme Court in Green
V Briggs, 243 N.C. 745, has construed similar provisions
of G.S. 18-124 as being directory only and non-compliance
with the statute will not invalidate the election if the
failure to comply is not prejudicial to anyone, and does not
effect the outcome of the election as in Briggs, supra,
the 90 day provision appears to be for the benefit of the
proponents, thus if the proponents do not object to the
40] ATTORNEY GENERAL OPINIONS
additional time for circulation of the petition for additional
signatures, we do not believe the Court would hold the
subsequent election to be void for that reason. Here, as in
Briggs, the petition was not fully circulated because of
other elections being held and the County Board requested
the delay for this reason in order to conduct the other
elections. This would appear to be a valid reason for the
delay.
Robert Morgan, Attorney General
, James F. Bullock,
Deputy Attorney General
28 May 1969
Subject: ABC Act; Beer and Wine; Elections; Holding County-wide
Election After Municipal Election; Time of Holding
Requested by: Mrs. Margie P. Folger, Executive Secretary
Surry County Board of Elections
Questions: (1) Does the holding of an ABC election in a municipality
under a special act prohibit the holding of a county-wide
referendum under G.S. 18-61 ?
(2) Does the holding of the Mt. Airy election affect the
holding of a county beer and wine election ?
Conclusions: (1) No. Chapter 285, Session Laws of 1963, authorized
Mt. Airy to hold an election to authorize the sale of alco-holic
beverages therein. This Act contains no prohibition
as to the county holding an election to authorize the sale
- of such beverages in the county. Thus, upon request of the
county commissioners, or upon a proper petition, a county-wide
election may be held provided no election has been
held under G.S. 18-61 within three years, and the election
is not held on the day of a biennial county election or
within 60 days thereof.
(2) Yes. A county-wide beer and wine election may not
be held within 60 days of any general, special, or primary
election, unless the petition complies with G.S. 18-124 (f).
The facts presented in a letter dated May 21, 1969, indicate that an election
was held in the Town of Mt. Airy on April 22, 1969, to determine whether
liquor may be sold therein. We assume this election was called pursuant
to Chapter 285, Session Laws of 1963. This Act related only to the Town
of Mt. Airy and placed no limitation upon the right of the county to hold
an election for the sale of liquor under G.S. 18-61. Therefore, the county-wide
ABC election may be held, as provided in G.S. 18-61, if a county-wide
election thereunder has not been held within three years and the election is
not held on the date of any biennial election for county officers or within
60 days thereof.
6
' ATTORNEY GENERAL OPINIONS [VOL,
A county-wide election for the sale of beer and wine may be held, upon
proper petition, unless within three years an election has been held in the
county on the same question, unless the election is held within 60 days of
the holding of any general, special or primary election in the county, or
any municipality thereof.
However, the time restrictions in G.S. 18-124 (f) would not be applicable if
the petition requested that the beer and wine election be held on the same
date as an election on the question of the sale of alcoholic beverages.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
27 May 1969
Subject: ABC Act; Beer and Wine; Elections; Petition; Qualified
Signer
Requested by: Mrs. Margie P. Folger, Executive Secretary
Surry County Board of Elections
Question: Under G.S. 18-124, is it mandatory that the persons sign-ing
the petition must have been registered voters during
the last gubernatorial election?
Conclusion: No. Any qualified and registered voter is eligible to sign
a petition under G.S. 18-124, regardless of the time his
name was placed upon the registration books.
In a letter dated May 23, 1969, it appears that a beer and wine petition has
been circulated in Surry County, and that the name of a person, who was
not registered at the time of the gubernatorial election in 1968 but who
is now registered, appears on the beer and wine petition. Some question
arises as to whether he is a proper signer of the petition.
G.S. 18-124 requires the petition to be signed by 25% of the registered
voters of the county that voted for governor in the last election.
This section was construed in the case of Weaver v Morgan, 232 N.C.
642, wherein it was held that this section does not require that each signer
of the petition must have personally voted for a gubernatorial candidate in
the election, and that the 25% refers to the total number of voters who
voted for governor in the election.
Although the exact question presented in this opinion was not considered
by the Court in the Weaver case, it is our opinion that any qualified
registered voter whose name appears upon the registration book at the
time the petition is circulated is eligible to sign the petition, even though
such person was not registered at the time of the last gubernatorial election.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS
28 May 1970
Subject:
Requested by:
Question:
Conclusion:
29 July 1969
Subject:
Requested by:
Question:
Conclusion:
ABC Act; Beer and Wine; Elections; Sale Not Prohibited
in G.S. 163-272
Mr. A. D. Ward
New Bern City Attorney
Does G.S. 163-272, which prohibits any person to give
away or sell "intoxicating liquors" at any place within five
miles and within 12 hours of any election, prohibit the sale
of beer ?
No. The phrase "intoxicating liquor" as used in the Tur-lington
Act, G.S. 18-1, is broad enough to include beer.
However, G.S. 18-1(3) provides that "this article shall not
make unlawful any acts authorized or permitted by . . .
G.S. 18-63 through 18-92 . . ., the Beverage Control Act of
1939, as amended . . .". G.S. 18-45 requires liquor stores
to be closed on election days. However, we find no pro-vision
of the Beverage Control Act which requires beer
outlets to be closed on election day. "Alcoholic beverages"
as used in Article 2 of Chapter 18, means those beverages
which contain more than 14% of alcohol by volume. G.S.
18-60. Construing the various sections of Chapter 18 to-gether,
it appears that the sale of beer is not prohibited
by G.S. 163-272 in those counties or cities which permit
such sale.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
ABC Act; Beer and Wine; Hours of Sale and Consumption;
Eastern Standard Time
Mr. Broxie J. Nelson
Associate Raleigh City Attorney
Did Chapter 1131, Session Laws of 1969, which amended
G.S. 18-141 by merely adding the words "Eastern Standard
Time" after the hours stated therein, change the hours of
sale and consumption of beer and wine as already re-stricted
in G.S. 18-141, G.S. 18-105, G.S. 18-106 and G.S.
18-107?
Title 15, USCA Sections 260 through 267, has established
Eastern Standard Time in North Carolina. Sec. 260a
merely advances the Standard Time one hour during the
period commencing on the last Sunday in April and ending
on the last Sunday of October of each year. G.S. 18-141
prohibits the sale of beer and wine between the hours of
11:45 P.M. and 7:30 A.M., and prohibits the consumption
8 ATTORNEY GENERAL OPINIONS [VOL.
of these beverages on licensed premises between the
hours of 12:00 Midnight and 7:30 A.M. Chapter 1131,
Session Laws of 1969 merely added the words Eastern
Standard Time after the above stated hours. Since
Standard Time is established by the federal statutes,
Chapter 1131, Session Laws of 1969, did not change the
Standard time, thus it did not affect any change in the
hours of sale or consumption of beer and wine.
The Uniform Time Act of 1966, codified as Title 15 USCA, Sees. 260 et seq.,
establishes the same standard of time throughout each Standard Time Zone.
North Carolina is in the Eastern Standard Time Zone. Sec. 260a of Title 15,
provides that the standard time of each zone shall be advanced one hour
during the April-October period, but authorizes a state to exempt itself
from the advancement of time by appropriate statewide legislation. This
North Carolina has not done.
There is no standard of time designated by or under law as "Daylight
Saving Time". Thus during the April-October period, "Eastern Standard
Time" is merely advanced one hour, but "Eastern Standard Time" is in
effect in North Carolina the entire year. Thus Chapter 1131, Session Laws
of 1969, could not and did not change the standard of time in effect in
North Carolina, and did neither shorten nor extend the period of time in
which beer or wine may be sold and consumed in North Carolina. Neither
did the 1969 Act amend or modify G.S. 18-105 thru 18-107 relating to the
hours of sale and consumption of beer and wine.
Our interpretation has the concurrence of the U. S. Department of
Transportation as revealed by letter of July 23, 1969, which states as
follows
:
"The Uniform Time Act of 1966, section 3, provides that during
the period beginning on the last Sunday in April and ending on the
last Sunday in October, 'the standard time of each zone estab-lished
. . . shall be advanced one hour, and such time as so ad-vanced
shall ... be the standard time of such zone during such
period.' [Emphasis supplied]. According to this language of the
Act, and its legislative history, it has been the consistent position
of the Department of Transportation that all time in all U. S.
zones is 'standard' time. When during the April-October period
the time is advanced one hour, it is still 'standard' time. Neither
the statute nor its legislative history indicates that Congress in-tended
that there be more than one standard of time. There
clearly is no time designated by or under law as 'Daylight Saving
Time'.
"In view of the foregoing, we concur with the last paragraph on
page 1 of your letter and with your interpretation of the Uniform
Time Act and its effect on the North Carolina Statute."
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS 9
19 March 1969
Subject: ABC Act; Beer and Wine; Licenses; Qualification of Ap-plicant
Requested by: Mr. Ray B. Brady, Director
State Board of Alcoholic Control
Question: Is a person who was convicted of a felony in 1961 and who
has not had his citizenship restored under Chapter 13 of
the General Statutes eligible for the issuance of a beer
permit under the provisions of G.S. 18-130.
Conclusion: No. The conviction of a felony in 1961 would not auto-matically
disqualify an applicant; however, since his
citizenship has not been restored G.S. 18-130 would pro-hibit
the issuance of the permit.
The State ABC Board has received an application for a beer permit and
the applicant states therein that he was convicted of a felony in 1961 and
received an active sentence; he states that he has never had his citizenship
restored under Chapter 13 of the General Statutes.
G.S. 18-130, as amenc ed in 1963, requires the applicant to state under oath
that he has not been convicted of a felony within the past three years;
that if he had been deprived of his citizenship, it has been restored by the
court; and, in addition, authorizes the State ABC Board to determine
whether or not any person who has ever been convicted of a felony shall
be deemed as a suitable person to receive and hold a beer permit.
Under the facts presented, the conviction of the felony having been more
than three years prior to receipt of his application by the Board, would
not automatically disqualify the applicant. However, the restoration-of-citizenship
requirement is a separate and individual prerequisite of the
permit, and since the applicant states that his citizenship has not been
restored, the permit could not be issued until the procedure for restoration
of citizenship, as provided in Chapter 13 of the General Statutes, has been
complied with.
Under this section, even where the conviction has been more than three
years prior to the application and even though citizenship has been restored,
the discretion has been placed within the Board to determine whether the
applicant who has been convicted of a felony is a suitable person to receive
and hold a beer permit.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
3 December 1969
Subject: ABC Act; Beer and Wine; Manufacture of Wine in a Dry
County
10 ATTORNEY GENERAL OPINIONS [Vol.
Requested by: Mr. Otto Wells
Assistant Director Enforcement Division
State Board of Alcoholic Control
Question: Is it legal to manufacture those wines defined in G.S. 18-64,
and those authorized in G.S. 18-100, in a so-called "dry
county" where the sale of wine, beer or whiskey is not
permitted? s
Conclusion: Yes. The Turlington Act, as first enacted, prohibited the
manufacture of beer and wine in North Carolina (G.S.
18-1). Later it was amended so as not to make unlawful
(V any acts authorized or permitted by G.S. 18-100 through
G.S. 18-104, authorizing cultivation and manufacture of
light domestic wines; G.S. 18-63 through G.S. 18-92, the
Beverage Control Act of 1939, and the Fortified Wine Con-trol
Act of 1941.
G.S. 18-67 authorizes the brewing or manufacture for sale, those beverages
enumerated in G.S. 18-64. G.S. 18-99.1 authorizes the manufacturing of
fortified wines as defined in G.S. 18-96 and G.S. 18-99.
Although Article 11 of Chapter 18 authorizes elections on the sale of
wine and beer in counties and municipalities, there is nothing in this
Article or any other section of Chapter 18 which indicates that wine may
not be manufactured in a dry area. G.S. 18-99 provides that nothing in
Chapter 18 shall prevent wholesale distributors from possessing, trans-porting,
warehousing or selling, as wholesalers, in any county of the State
provided the sale is to properly licensed persons. Thus it appears that
when a manufacturer has obtained the State license required by G.S. 18-67,
and obtained from the State Board of Alcoholic Control the permits re-quired
by G.S. 18-112, he may locate the winery in any county of the
State and sell to those persons properly licensed under Chapter 18 of the
General Statutes. Of course, should there be a local act expressly pro-hibiting
the manufacture of wine within a county, then such local act
would be controlling.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
27 March 1970
Subject: ABC Act; Beer and Wine; Revocation of Permits Without
a Hearing; Authority of the State Board of Alcoholic
Control
Requested by: Mr. Lee P. Phillips, Director of Enforcement
State Board of Alcoholic Control
Questions: (1) If the State Board of Alcoholic Control, through its
agents, discovers that premises to which a beer or wine
permit has been granted under a corporate name have a
40] ATTORNEY GENERAL OPINIONS 11
new manager or corporate member who has not qualified
under the requirements of the Board for persons handling
beer and wine, do the agents of the State Board of Alco-holic
Control have authority to pick up that permit with-out
affording a hearing to the permittee ?
(2) Where the agents of the State Board of Alcoholic
Control discover that the premises have been abandoned
by the permittee and are now being operated by someone
else who has not been approved, do the agents have the
authority to pick up any permits issued to the former
permittee at those premises without affording a hearing
to the current owner and occupant of the premises?
Conclusions: (1) Agents of the State Board of Alcoholic Control do
not have the authority, without giving the requisite ten
days' notice and opportunity for a hearing, to pick up beer
or wine permits at a location to which the permit has been
issued to a corporation, even though the manager or some
of the corporate members may have changed without ap-proval
by the Board.
(2) Agents of the State Board of Alcoholic Control have
the authority to pick up a permit without notice and hear-ing
at premises which have been abandoned by the per-mittee
and are now occupied by a person to whom a permit
has not been issued for those premises.
In a letter of March 11 the opinion of this Office is requested in two
troublesome areas of enforcement dealing with wine and beer permits.
It was indicated that on occasion State ABC officers discover that an
establishment on which a beer and /or wine permit is held in a corporate
name has changed managers or has changed some of the corporate officers
or directors without the prior approval of the State Board and that the
officers have been hesitant to pick up such permits without affording op-portunity
for a hearing. It was also indicated that on some occasions,
officers will go to premises and find those premises have been abandoned
by the person holding the beer and /or wine permits and are now occupied
by another person purporting to operate under those permits and under
those circumstances you also inquire as to whether or not agents have the
authority to pick up the permits without notice and hearing.
With regard to the former situation, we do not believe that the State
Board or its agents have the authority to pick up a permit without giving
a person the requisite ten days' notice and opportunity for hearing.
G.S. 18-137 provides:
"Before the Board may suspend or revoke a permit issued under
the provisions of this Article, at least ten days' notice of such
proposed or contemplated action by the Board shall be given to the
affected permittee. Such notice shall be in writing, shall contain
12 ATTORNEY GENERAL OPINIONS [VOL.
a statement in detail of the grounds or reasons for such proposed
or contemplated action of the Board, and shall be served on the
permittee by sending the same to such permittee by registered
or certified mail to his last known post office address or by per-sonal
service by an agent of the Board. The Board shall on such
notice appoint a time and place when and at which the said
permittee shall be heard as to why the said permit shall not be
suspended or revoked. The permittee shall at such time and place
have the right to produce evidence in his behalf and to be
represented by counsel."
Thus, the statutory mandate that the Board give notice and hold a hearing
before revoking a permit is clear. In the situation posited, the permittee,
i.e., a corporation, continues to exist but changes officers, directors or a
manager. Although G.S. 18-130(12) clearly gives the Board authority,
upon considering the issuance of a permit, to take into consideration
certain requirements and qualifications of the officers, directors, stock-holders
owning more than 25% of the stock, and managers of the corpora-tion,
once the permit is issued, there is no statutory requirement that
these conditions continue in existence, or that the Board be given prior
notice before they change in order for the permit to continue. Thus, in
effect, as long as the permittee itself continues in existence, revocation or
suspension without notice would be improper and the permittee would have
to be accorded a hearing.
' L
G.S. 18-132.1 contemplates that a new permit would issue with a change in
managers, but that statute deals with application fees and does not give
additional powers to the Board. Proper procedure would be to issue the
Board's show cause order why the permit should not be canceled.
With regard to the second situation, however, it is the opinion of this
Office that the Board's agents have authority to pick up a permit without
notice and opportunity of hearing. In the situation described, the operation
for which the permit was issued, namely to a particular person or corpora-tion
at a particular location, has ceased to exist. Although the location
continues in operation, the person has changed and that person has not
received a permit from the Board. Therefore, the permit is no longer
valid. G.S. 18-129 makes it clear that the Board in considering the fitness
of an applicant for a permit to sell beer and wine shall inquire into the
character of the applicant himself as well as to the location of the place
of business, its general appearance, and type of business. Thus, there are
really two criteria: First, whether the person making the application, or
the corporation, is suitable to hold a permit and, secondly, whether the
premises are a proper place to which a permit should be issued. The
permit is, therefore, issued on two conditions, that is, that the person
continues to operate and that he continues to operate at that location.
When either one of those conditions—in this case, the person—ceases to
exist, then the permit is no longer valid. The agents of the Board may,
40] ATTORNEY GENERAL OPINIONS 13
therefore, pick up such permits without hearing and notice to the person
then occupying and operating the premises.
Robert Morgan, Attorney General
James Bullock,
Deputy Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
28 February 1969
Subject: ABC Act; Beer and Wine; Sunday Sales; Regulation by
County
Requested by: Mr. W. W. Speight
Pitt County Attorney
Questions: (1) May the county prohibit all Sunday sales of beer
except in a private country club ?
(2) May the county prohibit all Sunday sales of beer ex-cept
in restaurants and clubs having brown-bagging per-mits?
Conclusion: No. Although the board of county commissioners has the
authority to regulate and prohibit the sale of beer on
Sunday, the ordinance must be uniform and affect all
persons similarly situated or engaged in the same business
without discrimination.
Pitt County has adopted an ordinance under G.S. 18-107 prohibiting the
sale of beer throughout the County from 11:45 p.m. on Saturday to 7:30
a.m. on the folllowing Monday.
A private country club, having a brown-bagging permit, desires to sell
beer on Sunday to its guests and members. This situation gives rise to
the questions above.
All beer licensees are authorized to sell beer, even on Sunday, so long as
they do so in compliance with the law governing such sales. G.S. 18-105;
Davis V Charlotte, 242 N.C. 670. The County's authority is limited by
G.S. 18-107 to regulating and prohibiting sales on Sunday.
In Davis v Charlotte, 242 N.C. at 674, it is said:
"A municipal corporation is a creature of the General Assembly.
Ward V Elizabeth City, 121 N.C. 1, 27 S.E. 993. Municipal
corporations have no inherent powers but can exercise only such
powers as are expressly conferred by the General Assembly or
such as are necessarily implied by those expressly given. S v Ray,
131 N.C. 814, 42 S.E. 960; S v McGee, 237 N.C. 633, 75 S.E.2d 783.
" 'Municipal ordinances are ordained for local purposes in the ex-ercise
of a delegated legislative function, and must harmonize with
the general laws of the State. In case of conflict the ordinance
must yield to the State law.' S v Freshwater, 183 N.C. 762,
111 S.E. 161, and cases cited therein. A decision of this Court in
14 ATTORNEY GENERAL OPINIONS [VOL.
1883 applied this well established principle when there was con-flict
between a general State statute and a municipal ordinance
of the City of Goldsboro, both dealing with the sale of intoxicating
liquor on Sunday. S v Langston, 88 N.C. 692.
"It may be conceded that the City of Charlotte, under its charter
provisions and under G.S. 160-52 and G.S. 160-200(6) (7) (10),
had implied authority to adopt the ordinance in controversy in
the absence of legislation enacted by the General Assembly
dealing directly with the subject. Bailey v Raleigh, 130 N.C.
209, 41 S.E. 281; Paul v Washington, 134 N.C. 363, 47 S.E. 793.
But it is quite plain that the City of Charlotte cannot, by ordinance,
make criminal or illegal any conduct that is legalized and sanc-tioned
by the General Assembly. The ordinance, to the extent it
conflicts with the general State law, is invalid."
In S V McGee, 237 N.C. at page 639, the Supreme Court wrote:
"It is a fundamental rule that the governing body of a munici-pality,
clothed with power to enact and enforce ordinances for the
observance of Sunday, 'is vested with discretion in determining the
kinds of pursuits, occupations, or businesses to be included or ex-cluded,
and its determination will not be interfered with by the
courts provided the classification and discrimination made are
founded upon reasonable distinctions and have some reasonable
relation to the public peace, welfare, and safety.' 50 Am. Jur.,
Sundays & Holidays, section 11, page 810.
"Barnhill, J., in speaking for this Court in S v Trantham, 230
N.C. 641, S.E.2d 198, said: 'Legislative bodies may distinguish,
select, and classify objects of legislation. It suffices if the classifica-tion
is practical. Magoin v Bank, 170 U.S. 283, 42 L Ed 1037;
S V Davis, supra. They may prescribe different regulations for
different classes, and discrimination as between classes is not such
as to invalidate the legislative enactment. Smith v Wilkins, 164
N.C. 135, 80 S.E. 168. The very idea of classification is inequality,
so that inequality in no manner determines the matter of con-stitutionality.
Bickett V Tax Commission, 177 N.C. 433, 99
S.E. 415; R.R. v Matthews, 174 U.S. 96, 43 L Ed 909. The one
requirement is that the ordinance must affect all persons similarly
situated or engaged in the same business without discrimination.
City of Springfield v Smith, 322 Mo. 1129.' "
The business which the county ordinance would regulate is that of selling
beer. Thus, an ordinance prohibiting all beer licensees, except restaurants
and country clubs, from selling on Sunday would violate the cardinal re-quirement
that it must affect all persons engaged in the same business
without discrimination. See S v Scoggin, 236 N.C. 1.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS 15
2 October 1969
Subject: ABC Act; Beer and Wine; Sunday Sales; State ABC Board
Regulations; Power of Municipalities
Requested by: Mr. Daniel A. Manning
Williamston Town Attorney
Question: Can a town validly authorize the sale of wine on Sundays
under G.S. 18-107?
Conclusion: A municipal ordinance authorizing Sunday sales of wine
would be invalid as conflicting with Part 3, Section 5(c)
of the Wine Regulations of the North Carolina Board of
Alcoholic Control.
G.S. 18-107 states:
"In addition to the restrictions on the sale of beer and /or wine
set out in G.S. 18-105, the governing bodies of all municipalities
and counties in North Carolina shall have, and they are hereby
vested with, full power and authority to regulate and prohibit the
sale of beer and/or wine from 11:45 P.M. on each Saturday until
7:30 A.M. on the following Monday.
"The power herein vested in governing bodies of municipalities
shall be exclusive within the corporate limits of their respective
municipalities, and the powers herein vested in the county commis-sioners
of the various counties in North Carolina shall be exclusive
in all portions of their respective counties not embraced in the
corporate limits of municipalities therein."
However, Part 3, Section 5(c) of the Wine Regulations relating to the
retail distribution and sale of wine of the North Carolina Board of
Alcoholic Control states:
"No wine shall be sold between the hours of 11:45 p.m. and 7:30
a.m. and wine shall not be sold during any hours on Sunday or
Election days. In cases where local ABC Boards restrict the hours
of sale more stringently than above, the hours set by said local
ABC Boards shall apply."
The town attorney states as follows:
"Since the above statute seems to be in conflict with the regula-tion
of the North Carolina Board of Alcoholic Control, a ruling
of the Attorney General is requested on the question of whether
or not the Town can enact an Ordinance pursuant to General
Statute 18-107 permitting the limited sale and purchase of wine
on Sundays."
A study of the history of the statutes and regulations resolves the ap-parent
conflict. Wine sales were originally authorized on Sunday through-out
the State, except that G.S. 18-107 authorized cities within corporate
limits and counties outside corporate limits to regulate or prohibit Sunday
sales of wine.
16 ATTORNEY GENERAL OPINIONS [Vol.
G.S. 18-107 was originally enacted in 1943. A 1947 amendment to G.S.
18-109, which is now incorporated in G.S. 18-109(7) (c), gave the State
Board of Alcoholic Control absolute authority, in its discretion, to fix all
hours of sale of wine in all counties and municipalities in which such sale
is permitted. Pursuant to this latter statute, the above quoted statewide
regulation was adopted by the State Board and, therefore, a municipality
does not at present have any authority to legalize Sunday sales of wine.
(This regulation does not affect municipal or county regulation of Sunday
sales of beer.)
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
24 June 1969
Subject: ABC Act; Brown-bagging Permits; Civic Club Holding
Dance in Warehouse Open to Public
Requested by: Mr. W. C. Cohoon, Chairman
State Board of Alcoholic Control
Question: Is it legal for persons to "brown-bag", with or without
permit, in a private warehouse rented to a civic club for
the purpose of holding a dance when the public is generally
in attendance and admission is by ticket sold in advance
and at the door ?
Conclusion: No. Under G.S. 18-51, liquor may be possessed and con-sumed
only in those places authorized by law. A tobacco
warehouse being used by a club for a dance to which the
general public is admitted by sale of tickets does not
qualify as a place for which a license may be issued for
"brown-bagging," and it is not a "private property," not
open to the general public where a person, his family and
bona fide guests may consume alcoholic beverages.
From information furnished, it appears that a civic club plans to hold a
dance in a tobacco warehouse which is furnished the club free of charge
except for fire and liability insurance. The general public is invited and
tickets are sold in advance by members of the club and friends, and
tickets are sold at the door. The club desires to know if those in attendance
may bring their own alcoholic beverages and if "setups" may be furnished
by members of the club.
G.S. 18-51 provides that any person at least 21 years of age may possess
for lawful purposes alcoholic beverages not in excess of one gallon, pro-vided
it is purchased, possessed and consumed in accordance with law.
Under the statutes, a person may possess and consume such beverages in
his private residence, the residence of another with permission, in a hotel
or motel room rented by the person or to which he may be invited, or any
place of secondary residence with permission of the owner.
40] ATTORNEY GENERAL OPINIONS 17
In addition, such beverages may be possessed and consumed, but not in
view of the general public, on any other private property not primarily
engaged in commercial entertainment and not open to the general public
at the time, and when the express permission of the owner or person in
possession has been obtained, and when the beverage is consumed by the
person, his family or bona fide guests of the person or of the association
or corporation.
It is clear that under the facts presented alcoholic beverages may not be
possessed or consumed in the tobacco warehouse, which is open to the
public, in view of the general public, and engaging in commercial enter-tainment
at the time.
It is equally clear that, under the facts, the warehouse cannot qualify as
a social establishment, restaurant or related place, or as a "special oc-casion"
where a permit for brown-bagging may be issued.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
25 February 1969
Subject: ABC Act; Contracts; Authority of County ABC Board to
Execute Lease Agreement
Requested by: Mr. Rom B. Parker
Halifax County Attorney
Question: May a county ABC board execute a rental agreement for
a term of 20 years, subject to cancellation only if the
voters of the county vote against ABC stores in the
county ?
Conclusion: Although a county ABC board may execute a rental con-tract
for a term of years, such contract cannot bind
successor boards in matters of governmental discretion.
The facts presented in a letter of February 12, 1969, indicate that the
Halifax County ABC Board desires to rent a building from a corporation
for the purpose of operating an ABC store. The corporation insists upon
a minimum term of 20 years, and will not accept a cancellation clause
except the voting out of ABC stores in Halifax County by the voters
thereof.
A county ABC board has the authority to lease property for the purpose
of storing and selling alcoholic beverages in the county. G.S. 18-45(8).
In Plant Food Co. v Charlotte, 214 N.C. 518, the Supreme Court, in
speaking of contracts binding successor boards and commissions, wrote as
follows
:
"Where governmental powers of this kind are not involved or dis-advantageously
affected the right to make contracts, otherwise
unobjectionable to the law, is one of the most important incidents
18 ATTORNEY GENERAL OPINIONS [VOL.
of municipal government. Lambeth v Thomasville, 179 N.C. 452,
102 S.E. 775. In the administration of its proprietary affairs
the commissioners or councilmen of the town may make reason-able
contracts binding upon their successors running through a
term of years.
"The line between powers classified as governmental and those
classified as proprietary is none too sharply drawn, and is subject
to a change of front as society advances and conceptions of the
functions of government are modified under its insistent demands.
And it may be said that with respect to the making of contracts
the inhibition does not strictly apply where governmental discre-tion
as to the performance of the particular act is no longer
necessary.
"It is not to be supposed that because the general subject may
belong to the field of governmental powers no detail of administra-tion
may be carried out by contract, or that such contract must
be completed within the term of the contracting council. The true
test is whether the contract itself deprives a governing body, or
its successor, of a discretion which public policy demands should
be left unimpaired. It is obvious that a too rigid adherence to the
principle would leave the town council nursing a mere theory, in
the possession of an important governmental power without
practical means for its exercise, and unable to undertake any im-portant
public work, since no concern would equip itself and
undertake the project when the incoming administration, the
product perhaps of political accident, might repudiate the contract
at will during its performance."
G.S. 18-45(16) authorizes county ABC boards to discontinue the operation
of any store when it appears that the operation is not sufficiently prof-itable
to justify its operation; or when in the board's opinion the opera-tion
of the store is inimical or hurtful to the morals or welfare of the
community; or when directed by the State ABC Board to close the store.
G.S. 18-39(10) gives the State ABC Board the authority to approve the
location of county stores, and to close any county store for any cause
which appears sufficient to the State Board.
The proposed lease contract would attempt to bind both the State ABC
Board and successor county boards' authority to exercise governmental
discretion in closing the store or discontinuing its operation; thus, the
present board could not make such a contract as to bind successor boards.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
6 June 1969
Subject: ABC Act; County ABC Board; Term of Chairman Fixed
by G.S. 18-41
40] ATTORNEY GENERAL OPINIONS 19
Requested by: Mr. E. R. Woodard
Currituck County Attorney
Question: May the composite appointive boards name another mem-ber
of the county ABC board as chairman after the chair-man
has served one year of his three-year term?
Conclusion: No. G.S. 18-41 fixes the original and successor terms of
the chairman of a county ABC board at three years.
Should a vacancy occur before expiration of the chairman's
term, his successor is appointed for the unexpired portion
of the term.
The terms of the members of a county ABC board are staggered under
G.S. 18-41 so that, after the initial terms, one successor will be elected
each year and all successors serve for three-year terms. The statute ex-pressly
fixes the term of the chairman for three years and provides that
should a vacancy occur, the person appointed serves for the unexpired term.
Thus, every three years the composite boards will have an opportunity to
appoint a chairman. The statute contains no authority to change the
chairmanship from one member to another during the term for which the
chairman has been appointed. If, at the expiration of the chairman's term,
the composite board decided to appoint one of the two other board mem-bers
as chairman, such board member should resign. He could then be
appointed chairman for a three-year term, and the composite board could
appoint some person to fill the unexpired term of the member who
resigned.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
18 June 1969
Subject: ABC Act; Distribution of Funds for Law Enforcement
Purposes; City of Whiteville
Requested by: Mr. Benton H. Walton, III
Whiteville City Attorney
Question: Under Chapter 540, Session Laws of 1967, is the City of
Whiteville entitled to receive not less than 5% and not
more than 10% of the gross revenues for law enforcement
purposes ?
Conclusion: Yes. Section 6 of Chapter 540, Session Laws of 1967,
specifically provides that the Municipal Board of Alcoholic
Control shall allocate and disburse not less than 5% and
not more than 10% of the gross revenues to the general
fund of the municipality to be used for law enforcement
purposes.
From the facts presented in a letter of June 14, 1969, it appears that the
ABC Board of Whiteville has taken the position that since G.S. 18-45(15)
20 ATTORNEY GENERAL OPINIONS [Vol.
is not applicable to the municipal boards of alcoholic control, that the City
is not entitled to the 5-10% allocated to the municipality's general fund
for law enforcement purposes.
G.S. 18-45(15) authorized county ABC boards, and in the case of special
acts, municipal ABC boards to expend not less than 5% nor more than
10% of the total profits for law enforcement and authorized the ABC
boards to appoint ABC officers directly responsible to the boards for the !
enforcement of prohibition laws.
Chapter 540, Session Laws of 1967, in Section 5 thereof, specifically
provides that G.S. 18-45(15) shall not apply to municipal boards of
alcoholic control established pursuant to this special act.
Section 6 of Chapter 540 requires the ABC board to allocate and disburse,
by quarterly audit, not less than 5% and not more than 10% of the gross
revenues to the general fund of the municipality to be used for law en-forcement
purposes.
The clear legislative intent of Chapter 540 is that the municipal ABC
board would not have the authority to employ ABC officers and to expend
funds for that purpose; but in lieu thereof, the amount specified in the
act is paid into the general fund of the municipality for the express
purpose of law enforcement.
Thus, the City would be entitled to the amount specified in the act and
may use such funds for law enforcement purposes in the municipality.
Robert Morgan, Attorney General
James F. Bullock,
I
• Deputy Attorney General
7 August 1969
Subject: ABC Act; Taxation; Manufacturer's License; Beer Brewed
by Resident Brewer and Shipped into State for Trans-shipment
to Dealers in this State
Requested by: Mr. W. C. Cohoon, Chairman
State Board of Alcoholic Control
Question: May a firm licensed under G.S. 18-67 to manufacture beer
in this State, receive in this State beer for transshipment
to wholesale dealers in this State, which it has manu-factured
in another State, under authority of its resident
manufacturer's license ?
Conclusion: A firm licensed under G.S. 18-67 to manufacture beer in
this State, may receive in this State beer for transship-ment
to wholesale dealers in this State which it has manu-
. factured in another State, under authority of its resident
manufacturer's license, but only if it is actually engaged
in the manufacture of beer in this State.
40] ATTORNEY GENERAL OPINIONS 21
G.S. 18-67 requires a brewer or manufacturer of beer to obtain an annual
license from the Commissioner of Revenue in order to engage in the
brewing or manufacture of beer in North Carolina. A brewer, so licensed,
also maintains a brewery in another State, and it wishes to ship from
that brewery certain of its brands to its brewery in North Carolina, for
further transshipment to wholesale dealers in the State, in the same
manner that it makes shipments of beer brewed by it in North Carolina.
The question has arisen whether it may do so under the authority of its
resident brewer's license obtained under G.S. 18-67.
Prior to 26 June 1969, there could have been substantial doubt that it
could have done so. It is likely that it would have been necessary for
such brewery to first obtain a wholesaler's license under G.S. 18-69, not-withstanding
the provision in G.S. 18-67 that "no other license tax shall
be levied upon the business taxed in this section." This language had to
do with a tax upon the business of "brewing or manufacture of beverages
... in this State . . ." G.S. 18-67. No prohibition was placed upon the levy
of any other "business" of the brewer, if any, such as selling at wholesale
or retail. Only where the brewer received beer manufactured by it in
another state "for transshipment to dealers in other states" was it
authorized to receive such beer under its resident manufacturer's license.
However, G.S. 18-67 as amended by Chapter 1057 of the Session Laws of
1969 (ratified 26 June 1969) now provides that "when a licensed resident
manufacture . . . procures proper license under this section, it may receive
the (beer) . . . manufactured by it at some point outside this State but
within the United States, for transshipment to dealers in this or other
states, provided that such resident manufacturer is actually engaged in
the manufacturing in this State of (beer)." Thus, if a resident manu-facturer
(1) obtains a license under G.S. 18-67 and (2) actually engages
in the manufacture of beer, it may receive beer manufactured by it in
another state, for transshipment to dealers in this State, under its resident
manufacturer's license, and without the necessity of obtaining any other
license to do so.
Robert Morgan, Attorney General
Myron C. Banks,
Assistant Attorney General
5 December 1969
Subject: ABC Act; Transporting Liquor; Taxicab
Requested by: Representative Ernest B. Messer
Question: Does G.S. 18-51, as amended by Chapter 1018, Session
Laws of 1969, permit a taxicab to transport more than
one passenger at a time when the amount of liquor owned
and possessed by the passengers exceeds one gallon?
Conclusion: Yes. For example, if there are five bona fide paying
passengers, each may possess, in the passenger area of
the taxi, one gallon of liquor so long as it was his own
22 ATTORNEY GENERAL OPINIONS [VOL.
liquor and had not been opened, not for sale or barter,
and is being transported to and from a place where the
beverage may be lawfully possessed or consumed, and the
passenger is at least 21 years of age.
G.S. 18-51 authorizes any person who is at least 21 years of age to possess
and transport alcoholic beverages, not in excess of one gallon, for lawful
purposes. If the cap or seal on a container has been opened or broken, it
may not be transported in the passenger area of any motor vehicle. G.S.
18-51(1), as amended, makes it unlawful for any person operating a for
hire vehicle to transport liquor except when the vehicle is actually trans-porting
a bona fide passenger who is the actual owner of the liquor and
it is transported by each passenger in the amount and manner authorized
by G.S. 18-51.
, Robert Morgan, Attorney General
' James F. Bullock,
Deputy Attorney General
15 October 1969
Subject: ABC Act; Wine; Authorization to Sell 14% Wine
Requested by: Mrs. Winifred T. Wells
Wallace Town Attorney
Question: Under what authority may the sale of 14% wine be
legalized in the Town of Wallace ?
Conclusion; Under the authority of G.S. 18-127, where a municipality
has legalized the sale of beer and where ABC stores have
been established in the municipality, a town may, pursuant
to the authority of G.S. 18-120, authorize the sale of 14%
wine.
The Town of Wallace now has ABC stores located within its boundaries
and in an election has legalized the sale of beer within the town. The
sale of 20% wine is automatically established in municipalities where
ABC stores are located. G.S. 18-96 defines "fortified wines" as those having
a greater percentage of alcohol than 14%. Thus, the 14% wine apparently
can be sold in a municipality when authorized pursuant to G.S. 18-120.
,. . Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
,
'~ Staff Attorney
40] ATTORNEY GENERAL OPINIONS 23
3 February 1970
Subject:
Requested by:
Questions
:
ADMINISTRATION OF ESTATES
Administration of Estates; Administrator, Necessity of;
Bond Requirements; Joint Bank Accounts
Honorable Everitte Barbee
Clerk of Superior Court of Onslow County
(1) In an intestate estate, consisting of three joint bank
accounts with right of survivorship with balances respec-tively
of over $500, over $8,000 and over $3,300; two auto-mobiles
in the name of the decedent only with an aggregate
value of $2,300; a $10,000 life insurance policy payable to
the spouse; and outstanding indebtednesses consisting of
$1,200 in funeral bills, an undertermined amount of in-heritance
tax and miscellaneous debts totaling approxi-mately
$200; must an administrator be qualified?
(2) Under the facts stated in Question 1, should the
amount of the bond required of an administrator be based
on an aggregate sum to include one-half the value of the
joint bank accounts balances plus all the personal property
owned solely by the decedent ?
(3) Where a deceased testator's will gave his wife all his
household furnishings and personal eff'ects and his children,
naming each child, to share and share alike all of his
money and the only money is in joint bank accounts with
rights of survivorship with his wife as in Question 1, does
the joint bank account contract giving the survivor the
right of survivorship prevail leaving the children with no
money ?
(1) Yes. An administrator must qualify in a case such
as the one stated.
(2) The amount of the bond should be based on the
amount of the decedent's personal property which will pass
into the hands of the personal representative including
one-half the unwithdrawn balance in a joint bank account
with right of survivorship.
(3) The survivorship contracts in joint bank accounts
with right of survivorship ordinarily will control the dis-position
and passing of assets in such a joint bank account,
notwithstanding the terms of any will of the decedent joint
account holder.
G.S. 28-3 requires that any person entering upon the administration of a
decedent's estate must obtain letters of administration. In G.S. 28-68, there
is authority for debts owing a decedent to be paid directly to the clerk of
superior court if the amount owed does not exceed $1,000 and if all
Conclusions
:
24 ATTORNEY GENERAL OPINIONS [VOL.
amounts to be paid into the clerk aggregate less than $1,000. Where the
total amount paid into the clerk exceeds $1,000, "the clerk shall appoint
an administrator" G.S. 28-68(c), (emphasis added). In G.S. 28-68.2, there
is authority for the clerk without appointment of an administrator to
disburse money received pursuant to G.S. 28-68 for certain enumerated
purposes
;
—to pay the surviving spouse's and children's year's allowances,
—to pay funeral expenses up to $600, and
—to pay hospital, medical and doctor's bill for the period of the
decedent's last illness, not exceeding 12 months.
The remainder of any funds paid in pursuant to G.S. 28-68 would be paid
over to the surviving spouse, if any, or to heirs or distributees.
The authority conferred on the clerk by G.S. 28-68 and 28-68.2 is limited
to the maximum amount of $1,000 in total receipts and to the amount of
the total receipts received under G.S. 28-68 for any disbursements. Further,
authority for payment of funeral expenses without an administrator is
limited in amount to $600. These circumstances taken together demonstrate
that the estate in question does not fall within the terms of G.S. 28-68 and
28-68.2 as an exception to the general mandate of G.S. 28-3. No other ex-ception
appears applicable.
Concerning the basis for computing the amount of the administrator's
bond, the statute uses the term "double the value of all the personal
property of the deceased" (G.S. 28-34). It also provides for an increase
in the bond where the real estate is required to be sold to make assets
to pay debts (where personalty in the hands of the administrator is in-sufficient).
The purpose of the bond is to protect the estate and its bene- ,
ficiaries from misuse or dissipation in the hands of the personal representa-j
tive. Assuming that these three bank accounts are executed in conformity '
with the terms of G.S. 41-2.1 and have a valid contract of survivorship,
the moneys contained therein would pass to the joint tenant according to
the terms of G.S. 41-2.1, subject only to the conditions contained in that
statute.
G.S. 41-2.1 (b)(3) states:
"Upon the death of either or any party to the agreement, the
survivor, or survivors, becomes the sole owner, or owners, of the
entire unwithdrawn deposit subject to the claims of the creditors
of the deceased and to governmental rights in that portion of the
unwithdrawn deposit which would belong to the deceased had said
unwithdrawn deposit been divided equally between both or among
all the joint tenants at the time of the death of said deceased."
(Emphasis Added).
While G.S. 41-2.1(b)(3) provides the substantive rights of the parties in
the unwithdrawn deposit in a survivorship situation; G.S. 41-2. 1(b) (4)
provides the mechanics. It states:
i
"Upon the death of one of the joint tenants provided herein the
j
banking institution in which said joint deposit is held shall pay
40] ATTORNEY GENERAL OPINIONS 25
to the legal representative of the deceased, or to the clerk of the
superior court if the amount is less than one thousand dollars
($1,000), in accordance with G.S. 28-68, the portion of the unwith-drawn
deposit made subject to the claims of the creditors of the
deceased and to governmental rights as provided in subdivision
(3) above, and may pay the remainder of the surviving joint
tenant or joint tenants. Said legal representative shall hold the
portion of said unwithdrawn deposit paid to him and not use the
same for the payment of the claims of the creditors of the de-ceased
or governmental rights unless and until all other personal
assets of the estate have been exhausted, and shall then use so
much thereof as may be necessary to pay any remaining debts
of the deceased or governmental claims. Any part of said unwith-drawn
deposit not used for the payment of such debts or charges
of administration of the deceased shall, upon the settlement of the
estate, be paid to the surviving joint tenant or tenants."
There appears to be little doubt that except in cases within the purview
of G.S. 28-68 and 28-68.2, there is a requirement for a fractional portion
of the unwithdrawn balance to be paid to the personal representative and
to be held by him for the payment of claims of the creditors of the de-ceased
and the payment of governmental rights. The statutory language,
"the portion of the unwithdrawn deposit made subject to the claims of
creditors of the decreased and to governmental rights as provided in sub-division
(3) above," makes it clear that the entire one-half (in the husband
and wife situation) is the portion subject to these claims. Accordingly, it
would appear that in each two-depositor joint bank account situation,
one-half of the account may be paid immediately to the surviving joint
tenant. The remaining one-half of each account shall be paid to a personal
representative who is then obliged to hold these amounts as a fund from
which personal debts of the deceased joint tenant may be satisfied if all
other personal property is exhausted and from which government rights
are to be satisfied. Accordingly, the amount of bond should be based upon
all funds coming into the hands of the personal representative. This would
necessarily include, in our case, the two automobiles, one-half of the three
joint bank accounts and any cash or other personal property on hand.
The amount of the debts would not figure into the computation of the bond
unless the debts exceeded the amount of personal property and required
the liquidation of real estate in order to make assets, in which case, G.S.
28-34 would require an upward adjustment of the bond amount.
In North Carolina, the right to survivorship in joint bank accounts
established by written agreement is established by G.S. 41-2.1. In inter-preting
that statute, where other principles are not stated in the text of
the statute, the common law will govern.
"Under common law principles applicable to joint tenancies, the
survivor takes the entire property free and clear of claims or
creditors of the deceased tenant. This is the common law rule in
North Carolina; and in the absence of statute, it has been applied
26 ATTORNEY GENERAL OPINIONS [VOL.
in respect to a joint bank account where the parties had agreed
to the right of survivorship." See Lee, NC Law of Personal
Property, Section 63; citing Wilson County v. Wooten, 251 NC 667.
Pertinent to your particular question, the Wooten case sets out the rule
that
"Where two persons sui juris enter into a contract that funds on
deposit in their joint bank account should constitute a joint
tenancy with right of survivorship, such contract is effective and
the survivor is entitled to the funds free from the claims of the
heirs or personal representative or creditors of the deceased tenant
in the absence of fraud." See 1 Strong, NC Index 2d; Banks,
Section 4, page 651. The express terms of G.S. 41-2.1 are the only
limitation to this rule.
Consistent with the common law theory of joint tenancy with right of
survivorship enunciated in the Wooten case, the direction stated in the
list sentence of G.S. 41-2. 1(b) (4) is clear and unequivocal.
"Any part of said unwithdrawn deposit not used for the payment
of such debts or charges of administration of the deceased shall,
upon the settlement of the estate, be paid to the surviving joint
tenant or tenants."
Robert Morgan, Attorney General
Sidney S. Eagles, Jr.,
Assistant Attorney General
13 October 1969 -
Subject: Administration of Estates; Administrator; Right of Minor
Widow to Nominate Administrator
Requested by: Honorable Edgar W. Tanner
Rutherford Gouty Clerk of Superior Court
Question: Does the widow of the deceased, who is a minor, have the
right to nominate someone to serve as administrator of
her deceased husband's estate ?
Conclusion: A widow, who is a minor, does have the right to nominate
someone to serve as administrator of her deceased hus-band's
estate.
Your telephone inquiry indicated that the deceased husband, himself a
minor, was killed and left a minor widow and one child. The father of
the deceased has qualified as administrator but now the widow has indicated
that she wants her mother to qualify as administratrix of the husband's
estate.
The Supreme Court specifically said in Wallis v Wallis, 61 N.C. 78 (1863),
where the widow is 17 that, although a minor may not serve, the Court
"might have granted the administration to such person as she should
appoint." The Supreme Court cited two cases for authority on that point.
One of them does not deal with that issue. The other one, Ritchie v
McAuslin, 2 N.C. 220 (1795), dealt with the situation where the next of
40] ATTORNEY GENERAL OPINIONS 27
kin were out of the country and wanted to appoint someone else. The
Court indicated in that situation that the nomination by the next of kin
amounted to the exercise of a right and that it was incumbent on the
Court to repeal the previously issued letters of administration and appoint
the next of kin's nominee. However, in another case dealing with non-resident
next of kin the Supreme Court in Little v Berry, 94 N.C. 433
(1886) indicated that the court might issue letters to the nominee if it
wished to do so. In the case of Williams v Neville, 108 N.C. 559 (1891),
the Court indicated that the next of kin "had the right ... to select and
recommend such person as she might prefer if she did not wish to ad-minister
herself and if her nominee was suitable in character, habits and
; intellect to demand appointment." Again, the language in the Williams
case seems to indicate that it would be mandatory for the clerk to issue
I
letters to the proper nominee.
I
In 1912 the Supreme Court decided Boynton v Heartt, 158 N.C. 488 (1912).
The Court indicates that the statutes on nonresident administrators was
changed to forbid the service of nonresident administrators. Further, the
Court points out that there is no statute specifically allowing persons to
nominate another to serve in their position as administrator. The Court
says at page 493:
"While, as we have said, there is authority to the contrary, the
better view, as we think, is that the right to nominate depends
on the right to administer."
The Court concludes on pages 494-495 that since a nonresident is in-competent
to administer the estate, he is also incompetent to nominate
someone else to serve. By way of distinguishing this decision from the
situation where a minor is involved, the Court says at page 495:
"If, however, the law is stated correctly in the Wallis case,
there is a distinction between the disqualification on account of
nonage and nonresidence because in the first, the right to ad-minister
continues to exist while the exercise of the right is
suspended during minority, and in the case of a nonresident, he
has never had the right to administer."
The right to nominate has been further delineated in In Re Estate of
Smith, 210 N.C. 622 (1936). There the Court held that a person may not
exercise the right to nominate if someone of equal or closer degree of
kinship is willing to serve.
It is clear that the young widow may not serve as administratrix. (G.S.
28-8(1)). However, her right to administer is primary and higher than
that of the deceased's parent. (G.S. 28-6(a)(l)). It would therefore appear
in the light of the case law on the subject that the right of a minor widow
to nominate someone to serve in her stead exists and would take precedence
over the wish of the parent to administer the estate.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
28 ATTORNEY GENERAL OPINIONS [Vol.
12 September 1969
Subject: Administration of Estates; Administrators; Final Accounts
of Co-Administrators
Requested by: Honorable George M. Harris
Clerk of Superior Court
Caswell County
Question: Where four co-administrators have been appointed by the
clerk, may the clerk approve a final account signed by
only three of the four co-administrators ?
Conclusion: Yes.
Pursuant to G.S. 28-6(2), the Clerk of Superior Court of Caswell County
appointed four children of an intestate as co-administrators. Three of the
four co-administrators have prepared and submitted to the Clerk for the
Clerk's audit a final accounting. The other co-administrator refuses to sign
the final account. The final account appears to the Clerk to be proper in
all respects.
G.S. 28-184.1 provides, in part:
"(a) As used in this section, the term 'personal representatives'
includes executors, administrators, administrators c.t.a., admini-strators
d.b.n., collectors, and testamentary trustees.
. . . "(e) Subject to the provisions of subsections (b), (c) and
(d) of this section, all other acts and duties must be performed
by both of the personal representatives if there are two, and by a
majority of them if there are more than two."
Subsections (b), (c), and (d) are not relevant here. The filing of a final
account is "another act and duty" within the meaning of subsection (e).
The implication is clear that a majority of co-administrators has authority
to file a final account.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
25 June 1969
Subject:
Requested by:
Question:
Conclusion
:
Administration of Estates; Bond of Substitute or Successor
Administrator
Honorable Ben G. Floyd, Jr.
Clerk of Superior Court, Robeson County
When the administrator of an estate ceases to function
and the widow is appointed administrator de bonis non,
is she required to post a separate bond from that posted
by the original administrator ?
Each administrator or executor in an estate is required to
post a separate bond.
40] ATTORNEY GENERAL OPINIONS 29
In your inquiry you indicate that the deceased left a widow and an adult
unmarried son, that the widow renounced her right to qualify and the son
became administrator, posting required bond. Subsequently, the son died
and the widow now wants to qualify as administrator de bonis non.
G.S. 28-40 requires that:
"Before letters testamentary, letters of administration with the
will annexed, letters of administration or letters of collection are
issued to any person, he must give the bond required by law . . . ."
G.S. 28-34 contains the requirements as to such bonds. Since bonds are
given in the name of the individual qualifying as administrator as required
by the statutes and since the sureties remain liable on the bond of the
original administrator for such time as the statute of limitations may
provide, it is necessary for each new administrator to secure a separate
bond.
Of course, nothing would prevent the use of the same sureties if the other
requirements of the law are complied with.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
15 August 1969
Subject: Administration of Estates; Bonds, Executors, Administra-tors
and Trustees
Requested by: Honorable Glenn L. Hammer
Clerk of Superior Court
Davie County
Question: Is an individual who seeks to qualify before a clerk of
superior court as a testamentary trustee under the pro-visions
of G.S. 28-53 required to give bond for the faithful
performance of his duties ?
Conclusion: An individual who qualifies as a testamentary trustee is
required to give bond only in those instances when an
executor is required to give bond.
G.S. 28-53 provides:
"Trustees appointed in any will admitted to probate in this State,
into whose hands assets come under the provisions of the will,
shall first qualify under the laws applicable to executors, and shall
file in the office of the clerk of the county where the will is pro-bated
inventories of the assets which come into his hands and
annual and final accounts thereof, such as are required of executors
and administrators. The power of the clerk to enforce the filing
and his duties in respect to audit and record shall be the same as
in such cases. This section shall not apply to the extent that any
will makes a different provision." (Emphasis added.)
30 ATTORNEY GENERAL OPINIONS [Vol.
Executors give bond only when required by law or by the terms of the
will. See G.S. 28-35 which requires an executor to give bond (1) when he
is a non-resident of the State, (2) when a man marries a woman who is
an executrix, and (3) when an executor not already under bond obtains
an order to sell real estate for the payment of debts. By reason of G.S.
28-53, a testamentary trustee is also required to give bond in these
instances.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
31 March 1970
Subject: Administration of Estates; Funeral Expenses; Payment as
Priority and General Creditor Claim
Requested by: Honorable Martha O. Comer
Clerk of Superior Court
Surry County
Question; After an administrator has paid the preferred claims in
the estate including the $600 amount for a funeral bill and
has paid other priority items such as the widow's allow-ance
and administration expenses, in distributing the re-mainder
to general creditors, should the balance of the
funeral bill be included as a general creditor claim ?
Conclusion: After an administrator has paid the preferred claims in
the estate including the $600 amount for a funeral bill and
has paid other priority items such as the widow's allow-ance
and administration expenses, the balance of the
funeral bill should be included as a general creditor claim
in distributing the remainder to general creditors.
In a letter of March 24 an opinion was requested of this Office as to
whether, when an administrator has paid the priority items in the estate
including the $600 funeral priority claim, the widow's year's allowance
and costs of administration, and when a small amount remains to be dis-tributed
and divided among the general creditors, whether the balance of
the funeral bill is to be included as a general creditor claim.
The answer is clearly that it is.
The practice in the State has by no means been uniform and at least prior
to 1967, many estates were so administered that only $600 of the funeral
bill was paid. However, in 1967, Chapter 1066 of the Session Laws further
clarified the second-class provisions of G.S. 28-105 to add the following:
"The preferential limitation herein granted shall be construed to
be only a limit with respect to preference of payment and shall
not be construed to be a limitation on reasonable funeral expenses
which may be incurred; nor shall the preferential limitation of
40] ATTORNEY GENERAL OPINIONS 31
payment in the amount of six hundred dollars ($600.00) be dimi-nished
by any Veterans Administration, social security or other
federal governmental benefits awarded to the estate of the deceased
or to his or her beneficiaries."
This 1967 amendment clarified the statute to clearly indicate that the
$600 funeral priority was just that and not a limit on funeral expenses
which could be allowed from the estate. This was further buttressed by
the 1969 amendment, codified as G.S. 28-107.1, which provides:
"Funeral expenses of a decedent shall be considered as a debt
of the estate of the decedent and the decedent's estate shall be
primarily liable therefor. The provisions of this section shall not
affect the application of G.S. 28-105."
Therefore in the estate described in the letter of March 24, the ad-ministrator's
contention as to the distribution would be correct.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
30 October 1968
Subject: Administration of Estates; Guardians, Appointment of
Requested by: Honorable Everitte Barbee
Clerk of Superior Court
Onslow County
Conclusion: A clerk of superior court may establish the relationship
of guardian and ward between two persons residing on a
federal reservation.
Your inquiry is as follows:
"Please advise me your opinion as to jurisdiction in matters of
appointing guardians for infants living in the housing area of
Camp Lejeune, North Carolina.
"The following is a specific case:
"Petition was filed by an individual without legal representation
for his appointment as guardian for his brother, a seventeen year
old minor living with him at Tarawa Terrace, which is located on
Camp Lejeune, a federal reservation. The petition declares the
mother and father of the infant deceased. The petitioner entered
military service from his home, Newark, New Jersey. The minor
has no income or other assets."
It is noted that the Camp Lejeune federal reservation is located within the
boundaries of Onslow County. I cannot believe that it is or was the intent
of the Legislature that a person living within the boundaries of Camp
Lejeune should have no way of being appointed a guardian or made a ward.
32 ATTORNEY GENERAL OPINIONS [VOL.
I am of the opinion that the Clerk of Superior Court of Onslow County
may establish the relationship of guardian and ward between two persons
residing on the Camp Lejeune, North Carolina, federal reservation, since
I find nothing in the law to the contrary.
T. W. Bruton, Attorney General
R. S. Weathers, Staff Attorney
17 September 1969
Subject: Administration of Estates; Guardians; Clerk's Duty on
Final Accounting by Guardian
Requested by: Honorable Lanie M. Hayes
Clerk of Superior Court, Warren County
Question: Does it fall within the authority and responsibility of the
clerk of superior court, under G.S. 33-41, to disapprove the
final account of a guardian because a final distribution
of the ward's estate was made by the guardian to the
ward's distributee rather than to the ward's administrator.
Conclusion: Yes.
The guardian of a deceased ward has tendered a final accounting for audit
and approval by the clerk of superior court. The account reveals a final
distribution by the guardian directly to the ward's distributee rather than
to an administrator of the ward's estate (no administrator having been
appointed).
In order to discover the extent of the clerk's authority and responsibility
under G.S. 33-41, dealing with the guardian's final account, an examination
of G.S. 33-39, dealing with the annual account of the guardian, is essential.
G.S. 33-39 empowers the clerk to examine, under oath, the guardian
". . . or any other person, concerning the receipts, disbursements or any
other matter relating to the estate." The statute then places upon the clerk
the responsibility for determining the propriety of the annual account by
stating that, ". . . if he approve the same, he must indorse his approval
thereon." Thus G.S. 33-39 seems clearly to contemplate an examination
by the clerk of all aspects of the guardian's accounting and not merely a
balancing of debits and credits. Due to the similarity of the subject
matter of G.S. 33-39, and G.S. 33-41, it would seem that the legislature
intended for the specific provisions of G.S. 33-39, as noted above, to be
applicable to G.S. 33-41 without the necessity of reiterating them in the
latter section. First Citizens Bank and Trust Co. v. Parker, 225 N.C. 480,
35 SE2d 489 (1945) ; see also Wiggins, Wills and Administration of
Estates in North Carolina, §323. .
Given the broad nature of the statutory language underlined above, it
would seem that a determination of the propriety of the final distribution
as made by the guardian would reasonably come within the scope of the
clerk's authority and responsibility in auditing the final account. The
40] ATTORNEY GENERAL OPINIONS 33
question whether a final distribution by the guardian directly to the dis-tributee
is proper can be answered by the application of settled legal
principles dealing with the termination of a guardianship by the death of
the ward. A guardianship is necessarily terminated by the death of the
ward and the right to the ward's property passes to the personal repre-sentative
of the decedent's estate subject to the guardian's right to retain
possession for the period of time required to make a final settlement of
the guardianship account. Winjum v. Jesten, 191 Minn. 294, 253 N.W.
881 (1934) ; Harrison v. Tonge, 67 Ga. App. 54, 57 (1942) ; see also 3 Lee,
N.C. Family Law §269. Upon the ward's death the relationship between
the guardian and the ward's personal administrator becomes that of
debtor and creditor. Files v. Buie, 131 Tex. 19, 112 S.W.2d 714 (1938);
see also, 39 C.J.S. 62, Guardian and Ward §41. Further, the guardianship
should be immediately terminated, the guardian discharged, and any unpaid
claims against the estate handled by the administrator. Files v. Buie,
131 Tex. 19, 112 S.W.2d 714 (1938) ; see also, 3 Lee, N.C. Family Law
§269. It appears that the law contemplates the appointment of an ad-ministrator
to wind up the aflFairs of the deceased ward rather than a
continuation of the guardianship for this purpose.
It is our opinion that the clerk should not approve the final account as
tendered by the guardian due to the improper distribution. An administrator
should be appointed and the decedent's estate distributed to the ad-ministrator.
Robert Morgan, Attorney General
J. A. Benoy,
Deputy Attorney General
Russell G. Walker, Jr.,
Staff Attorney
16 April 1969
Subject: Administration of Estates; Joint Bank Account; Power of
Clerk of Superior Court to Collect and Distribute Funds
Requested by: Honorable Louise S. Allen
Clerk of the Superior Court
Washington County
Question: A husband and wife have a joint survivorship account
payable to either or the survivor. The husband dies,
leaving no will. The bank releases one-half of the account
to the wife, the surviving spouse.
Can the bank legally release the other one-half of this
account to the clerk of the superior court if the amount
in the account is less than $1000 and no administrator has
been appointed, as set out under G.S. 28-68, to be dis-bursed
by the clerk under G.S. 28-68.2 ?
Conclusion: The bank in which the account is maintained may not pay
over to the clerk under the authority of G.S. 28-68 to be
disbursed in accordance with G.S. 28-68.2. This is pre-cluded
by the provisions of G.S. 41-2(b).
34 ATTORNEY GENERAL OPINIONS [VOL.
This opinion assumes from your inquiry dated April 11, 1969 that the
account in question falls within the purview of G.S. 41-2.1 dealing with
"Right of Survivorship in bank deposits created by written agreement."
Provided that the signature requirements of G.S. 41-2.1 have been met,
the disposal of the remaining one-half of the assets in the joint account
belong to the survivor subject to the claims of creditors of the deceased
and to certain governmental rights. G.S. 41-2. 1(b) (3).
Instructions contained in G.S. 41-2. 1(b) (4) require that the banking in-stitution
pay over to the legal representative of the deceased that portion
of the unwithdrawn deposit made subject to the rights of creditors.
The language of the statute clearly forecloses any payment for the
purposes you suggest.
Robert Morgan, Attorney General
Sidney S. Eagles, Jr.,
Revisor of Statutes
7 July 1969
Subject: Administration of Estates; Surety on Bond of Administra-tor,
Executor and Collector
Requested by: Honorable Charles M. Johnson
Clerk of Superior Court
Montgomery County
Questions: (1) When there are sureties to a bond given by an
executor, administrator or collector under the provisions of
G.S. 28-34, may the sureties be residents of a county in
i the State other than the county where the bond is given?
(2) Assuming the answer to Question 1 is "Yes", does
the surety justify before the clerk in his county of residence
or before the clerk where the executor, administrator or
collector qualifies ?
Conclusions: (1) Yes.
(2) Before the clerk where the executor, administrator or
collector qualifies.
G.S. 28-34 provides in part:
"Every executor from whom a bond is required by law, and every
administrator and collector, before letters are issued, must give a
bond payable to the State, with two or more sufficient sureties,
to be justified before and approved by the clerk, conditioned that
such executor, administrator or collector shall faithfully execute
the trust reposed in him and obey all lawful orders of the clerk or
other court touching the administration of the estate committed
to him. Where such bond is executed by personal sureties, the
penalty of such bond must be, at lease, double the value of all the
personal property of the deceased. . . ." (Emphasis added.)
40] ATTORNEY GENERAL OPINIONS 35
This statute does not restrict the place of residence of the surety to the
county of qualification of the administrator, etc. No other statute has been
found which makes such a restriction.
With respect to Question 2, the portion of G.S. 28-34 underlined above
contemplates, we believe, that the sureties must justify before the clerk
issuing the letters.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
6 October 1969
Subject: Administration of Estates; Widow's Allowance; Award
Where Deceased Not a North Carolina Resident
Requested by: Honorable Fred Proffitt
Clerk of Superior Court
Yancey County
Question: Where a decendent and his wife lived in another state until
his death and the widow then moved to North Carolina, is
the widow entitled to assignment of the widow's year's
allowance by a clerk of superior court in North Carolina?
Conclusion: Where a decedent and his wife lived in another state until
his death and the widow then moved to North Carolina, the
widow is not entitled to assignment of the widow's year's
allowance by a clerk of superior court in North Carolina.
In your letter of September 22 you indicate that the deceased and his
wife bought a home and established residence in the State of Virginia
and that on July 3, 1969, the husband died intestate, leaving his widow
the sole beneficiary of his estate. The widow has subsequently moved to
the State of North Carolina, bringing such personal effects as she and
the decedent shared during their marriage, including an automobile and
certain household items.
She has applied to your office for the widow's year's allowance. Under the
case law as it has been applied in North Carolina we are of the opinion
that she is not entitled to this year's allowance. G.S. 30-15 contains the
provisions relative to the surviving spouse's year's allowance. This section
was amended by the 1969 General Assembly to increase the allowance
from $1,000 to $2,000 and such amendment applies to estates of persons
dying on or after July 1, 1969 (see Chapter 14 of the 1969 Session Laws).
While the statute on its face does not require that either the deceased or
the spouse, or both, be North Carolina residents, our court has been pre-sented
several factual situations in which the allowance was denied be-cause
residency requirements were not met.
Where the deceased is a resident of another state, but the wife is a
resident of the State of North Carolina at death, the Supreme Court has
36 ATTORNEY GENERAL OPINIONS [VOL.
held that North Carolina could properly assign the year's allowance
(Jones V Layne, 144 N.C. 600, 57 S.E. 372 (1907)); however, where the
deceased and wife are both residents of another state at the date of death,
then North Carolina is without jurisdiction to assign the year's allowance.
This was decided in the cases of Medley v Dunlap, 90 N.C. 527 (1884) and
Simpson v Cureton, 97 N.C. 113, 2 S.E. 668 (1887). In the Simpson case
the court said at page 15:
"A subsequent removal to this state does not change her [the
widow's] relations toward the estate since they are fixed and her
rights to share therein are determined at the intestate's death,
and by the laws of his domicil."
The Sim,pson case would seem to be exactly on point and governs the
present factual situation. The court in Simpson suggested that the proper
procedure would be for the widow to apply in the state of her husband's
death for any allowance to which she might be entitled, for the court to
discover there that there were no assets and for her then to request a
comity ruling from the North Carolina court giving her the allowance to
which she was entitled under the law of the other state out of the assets
located in North Carolina.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
18 September 1969 ' '^
Subject: Administration of Estates; Wills; Holographic Wills; Exe-cutors
and Administrators
Requested by: Honorable Robert Miller ^
Clerk of Superior Court
Stokes County
Questions: (1) In the event that the handwriting of the deceased
can be proved and there are no defects in other respects, it
is sufficient for the maker of a holographic will to sign or
write his name in the body of the will and have this
legally considered his signature to the will ?
(2) In a valid holographic will, is the widow of the de-ceased
testator entitled to serve without bond under the
authority of the statement in the will that she is appointed
"administrator ?
"
(3) Is there any significance in the naming in a holo-graphic
will of a son as "administrator" after the death
of the wife?
Conclusions: (1) Where the handwriting of a testator in a holographic
will can be proved and there are no defects in other re-spects,
it is sufficient signature for the testator in a holo-graphic
will to sign or write his name in his own hand-writing
in the body of the will.
40] ATTORNEY GENERAL OPINIONS 37
(2) In a valid holographic will, the widow of the testator
is entitled to serve without bond where the testator in his
will appointed his wife administrator and the will is silent
as to bond.
(3) The significance of a son of a testator being appointed
administrator at the death of the testator's spouse who
was named administrator will vary according to the status
of the administration of the estate at the death of the first
named administrator; if completed, there is no action re-quired
but if incomplete then he stands as the testator's
nominee as successor administrator de bonis non cum
testamento annexo.
The requisites of a holographic will in North Carolina are established by
G.S. 31-3.4:
"§31-3.4. Holographic will.—(a) A holographic will is a will
(1) Written entirely in the handwriting of the testator but
when all the words appearing on a paper in the handwriting
of the testator are suflficient to constitute a valid holo-graphic
will, the fact that other words or printed matter
appear thereon not in the handwriting of the testator, and
not affecting the meaning of the words in such hand-writing,
shall not affect the validity of the will, and
(2) Subscribed by the testator, or with his name written in
or on the will in his own handivriting , and
(3) Found after the testator's death among his valuable papers
or effects, or in a safe deposit box or other safe place
^ where it was deposited by him or under his authority, or
in the possession or custody of some person with whom, or
some firm or corporation with which, it was deposited by
him or under his authority for safekeeping.
(b) No attesting witness to a holographic will is required."
The underlined portion of G.S. 31-3.4 removes any doubt as to the efficacy
of a holographic testator signing the will by writing his name within the
body or text of his holographic will. See 1 Wiggins, Wills and Administra-tion
of Estates §§18, 20; In re Will of Goodman, 229 N.C. 444, 50 S.E.2d 34
(1948) ; In re Will of Williams, 234 N.C. 228, 66 S.E.2d 902 (1951).
The manner of probate of a holographic will is set out in G.S. 31-18.2
which is set out below:
"§31-18.2. Manner of probate of holographic will.—A holographic
will may be probated only in the following manner:
(1) Upon the testimony of at least three competent witnesses
that they believe that the will is written entirely in the hand-writing
of the person whose will it purports to be, and that
38 ATTORNEY GENERAL OPINIONS [VOL.
the name of the testator as written in or on, or subscribed
to, the will is in the handwriting of the person whose will it
purports to be; and
(2) Upon the testimony of one witness who may, but need not
be, one of the witnesses referred to in subdivision (1) of
this section to a statement of facts showing that the will was
found after the testator's death as required by G. S. 31-3.4."
The language of G.S. 28-34, "Every executor from whom a bond is required
by law, and every administrator and collector, before letters are issued,
must give a bond . . .", does not require bond of the holographic testator's
spouse whom he designated as executrix in his holographic will
even though he named her "Adminster" [sicl. The choice of titles selected
by the testator for the person nominated by him to pay debts of the
estate and distribute his property does not affect what title they bear in
contemplation of the statutes. Wiggins, Wills and Administration of
Estates, says at Section 215:
"In order that creditors may be paid and the estate distributed in
accordance with the wishes of the owner or in accordance with the
intestacy laws, it is necessary to appoint someone to represent the
deceased. When nominated by the testator's will, the representative
is known as the executor. If the decendent died intestate, his
representative is known as the administrator." (Emphasis added.)
Thus, for purposes of the bond requirements imposed by G.S. 28-34, the
holographic testator's wife is his nominee as "executrix", not "administra-tor".
"Unless required by the terms of the will or unless an order is
obtained to sell real property for the payment of debts, a domi-ciliary
executor is not required to give a bond. However, upon the
petition of any creditor or any other person interested in the
estate, when a man marries a woman who is an executrix, the
husband may be required to give a bond." 1 Wiggins, Wills and
Administration of Estates, §231, pp. 698-9. See G.S. 28-34, -35.
In the instant case, the son named as ". . . adminstor [sic'\ over the estate
at Claudie's death" is the testator's nominee to succeed the testator's
wife. If she qualifies, is appointed and dies, the son stands as the de-cendent's
nominee for administrator de bonis non cum testamento annexo.
He is entitled to the same treatment he would have been entitled to if he
had been named as the alternate or successor "executor" by the testator
instead of having been named "administrator." If administration had been
wound up at the time of the testator's widow's death, the appointment of
the son would be of no significance.
* Robert Morgan, Attorney General
Sidney S. Eagles,
Revisor of Statutes
40] ATTORNEY GENERAL OPINIONS 39
ADMINISTRATIVE LAW
15 March 1969
Subject: Administrative Law; Employment Security Act; Persons
Other Than Members of State Bar Prohibited from Prac-ticing
Law
Requested by: Mr. D. G. Ball
Chief Counsel
Employment Security Commission
Question: Can a partner represent the partnership as an employing
unit in matters and hearings before the Employment
Security Commission, although the person involved in the
representation is not an attorney? Can a corporation
through its officers, foremen, personnel director, overseer,
superintendent, etc., represent the corporation in matters
before the Employment Security Commission even though
none of the individuals described is an attorney ?
Conclusion: Under G.S. 84-4 and G.S. 84-5 any person appearing before
the Employment Security Commission as an attorney or
counsellor at law must be a member of the Bar of the
State of North Carolina, and corporations must appear
- ' before said Commission through their duly authorized at-torney.
The questions submitted by the Chief Counsel of the Employment Security
Commission seem to result from a consideration of the case of State v.
Pledger, 257 N.C. 634. This case resulted from the practices of a
corporation engaged in the sale and construction of homes. An agent of
the corporation, not being an attorney, prepared deeds of trust for the
corporation by the use of printed forms in which he filled in the blank
spaces, and the same agent supei vised the execution of the deeds of trust,
acknowledgment and recordation of the deeds of trust. The Court said
that the practice of law embraces the preparation of legal documents and
contracts by which legal rights are secured. It further said it was not the
purpose and intent of G.S. 84-4 to make unlawful all activities of lay
persons which come within the general definition of practicing law, which
is defined in G.S. 84-2.1, and then the Court said:
"A person, firm or corporation having a primary interest, not
merely an incidental interest, in a transaction, may prepare legal
documents necessary to the furtherance and completion of the
transaction without violating G.S. 84-4. The statute was not en-acted
for the purpose of conferring upon the legal profession an
absolute monopoly in the preparation of legal documents; its
purpose is for the better security of the people against incom-petency
and dishonesty in an area of activity aff'ecting general
welfare."
40 ATTORNEY GENERAL OPINIONS [VOL.
This decision, it would seem, relates exclusively to the preparation of legal
documents and does not reach into the field of appearances before quasi-judicial
commissions and courts. It is true that in the Pledger case it is
said in substance that a person involved in litigation, though not a lawyer,
may represent himself in any action or proceeding in a tribunal or court,
even in the Supreme Court. This right to appear pro se is an old and well
established right and apparently has a constitutional basis but the practic-ing
of law within the prohibitions relates to those who customarily or
habitually hold themselves out to the public as lawyers and excludes the
right of one to represent himself.
Inasmuch as G.S. 84-4 requires that any person who appears before the
Employment Security Commission must be a member of the Bar of the
State you should observe that statute, and, therefore, a partner cannot
represent the employing unit in matters and hearings before the Employ-ment
Security Commission if he is not an attorney. Likewise a corporation
may not appear by its agents before the Employment Security Commission,
and this is directly prohibited as to your Commission by G.S. 84-5.
Robert Morgan, Attorney General
Ralph Moody,
Deputy Attorney General
18 March 1970
Subject: Administrative Law; Hearings Before State Personnel
Board; Evidence; Applicability of G.S. 143-317
Requested by: Mr. Claude E. Caldwell, Director
State Personnel Department
Question: Does G.S. 143-317, making superior court rules of evidence
applicable to hearings before certain State agencies, apply
to a hearing before the State Personnel Board relating to
the dismissal of a governmental employee who is subject
to the State Personnel Act?
Conclusion: G.S. 143-317, which makes superior court rules of evidence
applicable to hearings before certain State agencies, does
apply to a hearing before the State Personnel Board re-lating
to the dismissal of a governmental employee who is
subject to the State Personnel Act.
The facts in the question raised here involve a female employee, subject
to the State Personnel Act, who was dismissed from employment. Upon
her dismissal, she appealed to the State Personnel Board in accordance
with the rules and regulations adopted by the State Personnel Board,
pursuant to G.S. 126-4(9) and G.S. 126-6. The specific question raised here
is whether or not G.S. 143-317, which deals with rules of evidence in ad-ministrative
proceedings before State agencies, is applicable at a hearing
when an employee, subject to the State Personnel Act, is dismissed from
work and appeals that dismissal to the State Personnel Board.
40] ATTORNEY GENERAL OPINIONS 41
In this regard, G.S. 143-317(3) provides as follows:
" 'Proceeding' shall mean any proceeding, by whatever name called,
before an administrative agency of the State, wherein the legal
rights, duties, or privileges of specific parties are required by law
or by constitutional right to be determined after an opportunity
for agency hearing." [Emphasis added.]
It is evident that an appeal hearing before the State Personnel Board is a
proceeding before an administrative agency of the State. Appeal hearings
before the State Personnel Board and the rendering of advisory opinions
by that Board are guaranteed for all those persons subject to the State
Personnel Act as authorized by G.S. 126-6 and as specifically set forth in
Paragraphs 1 and 2 of Article X, Section 4 of policies adopted by the
North Carolina Merit System Council.
It is clearly a privilege within the meaning of G.S. 143-317(3) for a person
subject to the State Personnel Act to have the right to an appeal hearing
before the State Personnel Board and further to have that same Board
determine the legitimacy of the individual's dismissal by the process of
issuing an advisory opinion or recommendation with respect thereto.
It is, therefore, the opinion of this office that G.S. 143-317 does apply to
appeal hearings before the North Carolina State Personnel Board when-ever
a person subject to the State Personnel Act seeks to invoke his right
to that appeal hearing.
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
James L. Blackburn, Staff Attorney
14 January 1970
Subject: Administrative Law; Rules of Civil Procedure; Inapplica-bility
to Administrative Hearings; Appointment of Guard-ian
Ad Litem by Industrial Commission
Requested by: Mr. William H. Stephenson, Secretary
North Carolina Industrial Commission
Questions: (1) Does the North Carolina Industrial Commission have
the authority to appoint a guardian ad litem in a tort
claims action or workmen's compensation case?
(2) What powers would such a guardian ad item have?
Conclusions: (1) The North Carolina Industrial Commission has the
authority to appoint a guardian ad litem in a tort claims
action or workmen's compensation case.
(2) The guardian ad litem has such powers and duties as
are listed in Rule 17 of the Rules of Civil Procedure which
are substantially similar to those of the next friend.
'42 . / ATTORNEY GENERAL OPINIONS [VOL.
/
When the new Rules of Civil Procedure were enacted by the 1967 General
Assembly (c. 954, 1967 Session Laws), G.S. 1-64, which provided for the
appointment of a next friend to prosecute actions on behalf of incompetents,
was specifically repealed. It was applicable, by its terms, to "actions and
special proceedings when any of the parties plaintiff are infants . . . ."
Since G.S. 143-291 constitutes the Industrial Commission a court for hear-ing
tort claims against State agencies, it was rightfully concluded that the
Commission had authority under §1-64 to appoint a next friend. Likewise,
because of the special provisions of G.S. 97-48 dealing with minor claimants
in workmen's compensation cases, the Commission has been justified in
appointing a next friend in certain cases where the interest of the minor
would be better protected. See Houser v Bonsai and Company, 149 N.C.
51, 62 S.E. 776 (1908), where it was held that a justice of the peace had
authority to appoint a next friend.
G.S. 1-64 was specifically repealed as mentioned above effective January 1,
1970. Substituted in its place was Rule 17 of the Rules of Civil Procedure
(G.S. lA-1). Rule 1 provides as to the scope of the new Rules:
These Rules shall govern the procedure in the superior and
district courts of the State of North Carolina in all actions and
proceedings of a civil nature except when a differing procedure
is prescribed by statute.
Thus, the applicability of the Rules is restricted to our district and
superior courts. The comments of Professor Sizemore in his article, "General
Scope and Philosophy of the New Rules", 5 Wake Forest Intramural Law
Review 1 at page 7, support this conclusion. The Federal Rules of Civil
Procedure, Rule 1, provide that the scope of those rules is confined to
federal district courts. The practice with federal agencies has been to
grant specific powers (such as the power to take depositions) in the statutes
applicable to the agencies.
The philosophy of the new Rules is clear. The General Assembly has
brought together in a cohesive whole the rules applicable to civil actions.
The Comments to Rule 1 state ". . . In general it can be said that to the
extent a specialized procedure has heretofore governed, it will continue to
do so." We are dealing here, we think, with a legislative oversight.
Certainly, it was not intended that incompetents bring actions against the
State or their employers in their own names—or not be able to bring them
at all.
With the language contained in G.S. 97-48, we are of the opinion that the
Commission should continue to appoint a representative of a minor's
interest and suggest that this procedure conform to the Rules to the
extent that the person be denominated a guardian ad litem.
And since G.S. 143-291 contemplates that not all actions will be brought
by, but merely on behalf of, real parties in interest when it provides that
the Commission will determine the issue of contributory negligence "on the
part of the claimant or the person in whose behalf the claim is asserted",
40] ATTORNEY GENERAL OPINIONS 43
since the Commission is constituted a court under that statute, and since
the State is to be held liable under circumstances where a private person
would be liable, the Commission should exercise authority to appoint a
guardian of the interests of minors in tort suits.
Rule 17 provides specific powers and duties of the guardian ad litem. It
does not mention receipt of funds, however, and we are of the opinion that
a guardian ad litem for an incompetent plaintiff stands in the place of
the former office of next friend—without power to receive funds for the
incompetent.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
AGRICULTURE
18 December 1969
Subject: Agriculture; Chickens; Handlers Act Not Applicable to
Broiler Chicken "Grow Out Contracts"
Requested by: Mr. Curtis F. Tarleton, Director
Markets Division, Department of Agriculture
Question: Are "grow out contracts" for broiler chickens subject to
the provisions of Article 44 (Unfair Practices by Handlers
of Farm Products) of Chapter 106 of the General Statutes?
Conclusion: No, provided the chickens never are owned by the producer.
In a letter of December 12, Mr. Tarleton described the "grow out" opera-tion:
"Virtually all of the broilers produced in the State are grown
under some type of contract, either written or verbal. The con-tractor
is usually a processor or feed manufacturer and in several
instances is a combination of the two. As a general rule, the
contractor in dealing with individual producers furnishes the baby
chicks, the feed for raising them, any medications needed to con-trol
and prevent disease and, in most instances, provides the
services of a trained field man to advise individual growers on
production problems.
"The contract between the two parties usually calls for paying the
grower so much per bird at the time they are marketed. This, at
present, is somewhere around 7 cents per bird and is payment for
the grower's labor and use of his facilities. In most instances, the
contracts are geared to a feed conversion ratio and, in many in-stances,
the amount paid the grower is determined to some degree
by the live broiler quotation released daily by our division's market
news service. The crucial fact here is that the broilers are never
owned by the producer.
44 ATTORNEY GENERAL OPINIONS [VOL.
"It is apparent from reading the 'Handlers Act' (G.S. 106-496
thru 106-501) that a 'handler' is one who either buys from a pro-ducer,
on credit, farm products to be resold at which time the
producer is to be paid, or takes possession of farm products as
agent for the producer, farm products to sell on a commission
basis. The Act requires a handler to procure a bond '. . . payable
to the State in favor of every contract producer or consignor of
farm products, and shall be continued upon compliance with all
the provisions of this article, and the faithful fulfillment of all
contracts, and for the faithful accounting for and handling of
produce by such handler, and for the payment to the producer of
the net proceeds of all consignments and sales."
Therefore, here, where the "contractor" always owns the broilers, the
"contractor" never becomes a "handler".
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
AIRPORT AUTHORITY
23 September 1969
Subject: Airport Authority; Indebtedness; Acquisition of Real Estate
for Site; Execution of Note and Deed of Trust; No
Authority Without Vote of People
Requested by: Mr. Jule McMichael
Rockingham County Attorney
Question: May the Rockingham County Airport Authority accept a
deed of real estate for airport purposes and execute a
note and deed of trust to the companies financing the
purchase?
Conclusion: An airport authority does not have authority to incur
indebtedness without approval by a vote of the people.
Chapter 622 of the Session Laws of 1963 authorized Rockingham County
to establish an airport authority empowered to acquire lands, construct
and operate an airport, and vesting in the authority all powers contained
in Chapter 63 of the General Statutes.
The statutes, both local and general, convey ample authority to acquire
property for airport purposes. The acquisition of property for airport
purposes is for a public purpose within the provisions of the State Con-stitution.
This was so held in Vance County v. Royster, 271 N.C. 53. That
same Supreme Court decision, however, pointed out that a local govern-mental
unit can incur indebtedness without approval of a majority of
voters only for necessary expenses, and that acquisition and operation of
40] ATTORNEY GENERAL OPINIONS 45
an airport is not a necessary expense in the constitutional sense. Mr.
Justice Lake, writing for the court, at pages 63-64, stated in part as
follows:
"It is not for the court to determine the wisdom of a decision to
contract a debt for a county or a city, but it is the duty of the
court to determine whether the proposed indebtedness is for a
'necessary expense' within the meaning of the above provision of
the Constitution. Sing v. Charlotte, 213 N.C. 60, 195 S.E. 271;
Palmer v. Haywood County, 212 N.C. 284, 193 S.E. 668, 113 A.L.R.
1195; Starmount Co. v. Hamilton Lakes, 205 N.C. 514, 171 S.E.
909; Storm v. Wrightsville Beach, 189 N.C. 679, 128 S.E. 17.
Pursuant to this authority and duty, this court has determined
that the construction of a public airport is not a 'necessary ex-pense'
in that sense. Airport Authority v. Johnson, supra; Sing v.
Charlotte, supra. Thus, a county or city may not contract a debt
or pledge its faith for the construction or operation of such an
airport without first submitting the question to a vote of the
people of such county or city."
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
BUSINESS & COMMERCE
28 March 1969
Subject: Business & Commerce; "Cooperative"; Use of Word in
Assumed Name
Requested by: Mr. W. E. Lane, In Charge, Transportation & Cooperatives
Department of Agriculture
Question: Does the use of the word "cooperative" in the assumed
name of an unincorporated association, which name is filed
with the Register of Deeds pursuant to G.S. 66-68 et seq.,
violate the provisions of G.S. 54-139 (b) ?
Conclusion: The use of the word "cooperative" in the assumed name
of an unincorporated association or group not organized
pursuant to Subchapter V of Chapter 54 is a violation of
of G.S. 54-139(b).
In a letter and telephone conversation of March 24, 1969, the facts indicate
that several groups of persons, not incorporated under the provisions of
Subchapter V of Chapter 54, have filed an assumed name with various
registrars of deeds, pursuant to G.S. 66-68 et seq., which assumed name
contains the word "co-operative".
Subchapter V of Chapter 54 provides a statutory method for producers
of agricultural products to form a corporation to orderly produce and
46 ATTORNEY GENERAL OPINIONS [VOL.
market their products. The subchapter has been held constitutional.
Tobacco Growers Co-Op Association v Jones, 185 N.C. 265, 117 S.E. 174
(1923).
G.S. 54-139 provides:
"Domestication of foreign co-operative corporations ; limitation on
use of word 'co-operative'.—(a) A foreign corporation that can
qualify as an association, as defined in G.S. 54-130(2) (b) (1) and
(2), may, under the provisions of article 8, chapter 55A, if it be
a nonstock corporation, or under the provisions of article 10,
chapter 55, if it be a stock corporation, be authorized to transact
business in this State.
"(b) No person other than as association organized under this
subchapter, or a foreign corporation domesticated pursuant to
subsection (a) of this section, or an electric or telephone member-ship
corporation domesticated pursuant to G.S. 117-28, shall be
entitled to organize, domesticate, or transact business in this State
if the corporate or other business name or title of such person
contains the word 'co-operative'."
The "co-operatives" in question do not qualify as one of the exceptions
listed in G.S. 54-139 (b). Therefore, the use of the word "co-operative" in
their assumed name is in violation of G.S. 54-139.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
26 January 1970
Subject: Business & Commerce; Foreign Corporations; Professional
Corporation Act; Domestication of Foreign Professional
Corporation
Requested by: Mr. Joseph G. Maddrey, Corporation Attorney
Office of Secretary of State
Questions: (1) Can a foreign professional corporation, in good
standing in its state of incorporation, domesticate in
North Carolina under (a) Chapter 55 (Business Corporation
Act), and (b) Chapter 55B (The Professional Corporation
Act) ?
(2) Does the licensing board of this State or the state of
incorporation of a foreign professional corporation certify
the facts by G.S. 55B-4(4) ?
Conclusions: (1) (a) Yes.
(b) No.
, (2) The licensing board of this State.
40] ATTORNEY GENERAL OPINIONS 47
jPrior to the enactment of Chapter 718, 1969 Session Laws (The Profes-sional
Corporation Act), there was no provision in the North Carolina
General Statutes for the incorporation of persons who engaged in certain
professions. This Act permits architects, attorneys, public accountants,
physicians, dentists, optometrists, osteopaths, chiropractors, veterinarians,
podiatrists, practicing psychologists and engineering and land surveyors
to incorporate and practice such professions provided certain other statu-tory
requirements are met.
Section 3 (G.S. 55B-3) of The Professional Corporation Act provides:
"The Business Corporation Act shall be applicable to such pro-fessional
corporations, including their organization, and profes-sional
corporations shall enjoy the powers and privileges and shall
be subject to the duties, restrictions and liabilities of other corpora-tions,
except insofar as the same may be limited or enlarged by
this chapter. If any provision of this chapter conflicts with the
provisions of the Business Corporation Act, the provisions of this
chapter shall prevail."
There is no specific provision in the Professional Corporation Act for the
domestication of foreign professional corporations. T

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NORTH CAROLINA
ATTORNEY GENERAL REPORTS
Volume 40
Robert morgan
attorney general
BIENNIAL REPORT
AND
OPINIONS
OF THE
ATTORNEY GENERAL
STATE OF NORTH CAROLINA
VOLUME 40
1968-1970
ROBERT MORGAN
Attorney General
LETTER OF TRANSMITTAL
31 December 1970
To his Excellency
Robert Scott, Governor
Raleigh, North Carolina
Dear Governor Scott
:
In compliance with Article III, Section 7 of the Constitution,
I herewith submit the report of the Attorney General for the
biennium 1968-1970.
Respectfully yours,
Robert Morgan
AMorney General
11
LIST OF ATTORNEY STAFF MEMBERS
ROBERT MORGAN
Attorney General
Harry W. McGalliard
Chief Deputy Attorney General
Jean A. Benoy
James F. Bullock
Harrison Lewis*
Ralph Moody
Robert Bruce White, Jr.
Deputy Attorneys General
Carroll Leggett
Special Assistant Attorney General
H. H. Weaver
Special Assistant
Myron Banks
William F. Briley
t. buie costen
Christine Y. Denson
Sidney S. Eagles, Jr.
George Goodwyn*
Robert Gunn*
Eugene Hafer
Guy a. Hamlin
Bernard Harrell*
Claude W. Harris
Charles M. Hensey
I. B. Hudson
Parks Icenhour
I. Beverly Lake, Jr.
Andrew H. McDaniel
William W. Melvin
William B. Ray
Millard R. Rich, Jr.
H. T. Rosser
Jacob Safron
Eugene A. Smith
Andrew A. Vanore, Jr.
Robert Weathers
Robert G. Webb
Thomas B. Wood
Assistant Attorneys General
Tom Kane, Ocean Law Consultant
James L. Blackburn
Lester Chalmers
Philip Covington
Edward Eatman
P. Andrew Giles
Ladson Hart
Maurice W. Horne*
Don Jacobs
Rafford Jones
Charles A. Lloyd
James Magner
BuRLEY Mitchell, Jr.
Bruce Morton*
Carlos Murray*
Fred Parker III*
Howard B. Satisky
Dale Shepherd*
Charles Wilkinson*
Richard League
Trial, Staff and Real Property Attorneys
Russell G. Walker, Jr.
Assistant Revisor of Statutes
*No longer on the staff.
Ill
TABLE OF CONTENTS
Letter of Transmittal ii
List of Attorney Staff Members iii
Summary of Activities v
Opinions of the Attorney General 1
Index to Opinions 896
ly
SUMMARY OF ACTIVITIES
This Office continues to act in its traditional role as legal counsel for
approximately 300 State departments and institutions, involving a wide
variety of work in litigation, appellate work, formal and informal opinions
and other legal services. Legislation creating several new departments or
boards and legislation expanding powers of existing departments passed
by the 1969 General Assembly has resulted in an increased work load.
The number of civil rights cases against State and local government
officers and cases challenging the constitutionality of State statutes in State
and federal courts has increased substantially during the biennium. The in-crease
in the number of cases coupled with the more active participation
by this Office in these cases because of State interest or because counsel is
being associated less in such cases results in a distribution of these cases
among several members of the staff.
The Office has also prepared for and participated in 37 HEW hearings
in less than a year and approximately ten court actions on school desegre-gation
matters dealing with the various local school systems in the State.
In addition, the Office is consulted and acts in an advisory role for at-torneys
for local school units in related matters.
The Attorney General continues his involvement in charitable trust
cases in State and federal courts.
The prime function of the Highway Division of the Department of
Justice is to represent the State Highway Commission in all legal matters
arising from all of its functions. During the biennium the State Highway
Commission awarded contracts in the total amount of $273,000,000.00. All
of these contracts are reviewed and approved as to form and legality by
attorneys in the Highway Division.
Probably the most important duty of the members of the Highway
Division is to represent the State of North Carolina in all condemnation
actions brought for the acquisition of land for the construction or improving
of highways within the State of North Carolina. On July 1, 1968, there
were a total of 1,346 of these cases pending in the various Superior Courts
in North Carolina. During the biennium a total of 852 new condemnation
actions were filed making a total of 2,198 cases in Superior Court involving
the acquisition of land for the building or improving of highways.
During the biennium a total of 960 cases pending in Superior Court
were settled and a total of 138 cases were tried before juries by attorneys
with the Highway Division. At the close of the biennium on June 30, 1970,
there remained pending, in the Superior Courts a total of 1,100 condemna-tion
suits. Thus it is seen that while a total of 852 new cases were filed, a
total of 1,098 cases were closed either by settlement or by trial during the
biennium. In the 1,100 pending actions the Highway Commission has ap-praised
the value of the land taken and damage to remainder at approxi-mately
$10,000,000.00. Based on past experience, it can be anticipated that
the landowners will claim damages in the amount of $40,000,000.00 in
these cases.
The Attorney General appointed a 22-member ad hoc Criminal Code
Revision Committee to consider the scope and feasibility of a proposed
revision of North Carolina's criminal law and procedure. Meeting on a
monthly basis, the Committee submitted its final report to the Attorney
General on June 30, 1970.
The Committee's recommendations call for early appointment of a
Criminal Code Revision Commission and commencement of a review,
analysis and, where necessary, revision of the State's criminal law.
Criminal appeals and habeas corpus actions in State and federal courts
have increased materially during the biennium. For example, it was found
that in the Middle District of North Carolina alone, federal habeas corpus
petitions increased from only 4 in 1963 to 39 in 1966 to 65 in 1968 to 82
in 1969. In the calendar year 1969 a total of 262 habeas corpus petitions
filed by State prisoners in federal court required handling by this Office.
In the State courts during 1969, 491 petitions for writ of habeas corpus or
review of post conviction hearings and other such matters were filed in
the North Carolina Court of Appeals and approximately 30 were filed in
the Supreme Court. If the petition is granted in these cases, the State of
course is required to file briefs. In answering the petition, however, it is
usually necessary to read a prisoner's record and sometimes a several
hundred page trial transcript.
Our traditional role in extraditions (assisting the Governor and the
demanding state) has been continued with approximately 50 cases handled
each year. In addition, the Office has taken on a new advisory role to the
Governor in assisting with some extradition matters where North Carolina
is the demanding state.
The Consumer Protection Division of the Office has actively partici-pated
in the liability insurance rate case, the Southern Bell Telephone rate
case, the Lee Telephone rate case, the Seaboard Mobile Agency concept
hearing, the Carolina Power and Light Company rate case, the Duke Power
Company rate case, several Interstate Commerce Commission rate cases
and two cases before the Federal Power Commission. The Division has re-ceived
approximately 2,150 complaints and inquiries in a little more than
a year's period which it has handled with correspondence and investigation.
The Division has obtained 4 restraining orders and filed one criminal case
against multiple defendants in the consumer protection area.
Approximately 2,500 bills were drafted for the 1969 General Assembly,
some of which involved multiple drafts or substantial pieces of research
in drafting.
Further editorial responsibilities with regard to publication of the
General Statutes have been undertaken. Several recompiled volumes of the
statutes have been published. Attorney General opinions are now carrying
annotations to the statutes and an interim annotation supplement to the
Statutes is being published for the first time.
The tort and workmen's compensation section of the Office has a sub-stantial
number of cases which are settled or involve hearings in the
Industrial Commission or superior court. The Office handles approximately
100 workmen's compensation hearings each year, several hundred claims
for damage to State vehicles or property, approximately 375 Travelers
cases, claims against the State for vehicular liability, approximately 700
claims per year arising out of school bus accidents and approximately
300 other tort claims against the State per year.
vi
Office staff act as collection attorneys on accounts receivable for all
State institutions and agencies. Figures are not available to indicate the
total amount collected on student loans, etc., but it is known to be sub-stantial.
Although opinions by the Attorney General to State and local govern-ment
officials require only a small part of staff time, the variety of legal
services and the increased activity of the Office were reflected in the
opinions—carried in full text—which follow.
Vll
ATTORNEY GENERAL OPINIONS
ABC ACT
26 March 1970
Subject: ABC Act; Advertising' Beer and Wine; Power of State
Board of Alcoholic Control to Regulate
Requested by: Mr. Lee P. Phillips, Director of Enforcement
State Board of Alcoholic Control
Question: Does the State Board of Alcoholic Control have the au-thority
to regulate advertising of wine and malt beverages
in the State of North Carolina ?
Conclusion: Pursuant to the provisions of 18-78 (d), the State Board of
Alcoholic Control has the power to adopt such reasonable
rules and regulations as they deem necessary regarding
the advertising of wine and malt beverages within the
State of North Carolina.
The inquiry dated March 16 indicates that a Statesville firm which pro-duces
litter receptacles which carry small advertisements has requested of
the State Board of Alcoholic Control an opinion as to whether they may
carry advertisements for wine and malt beverage wholesalers and retailers
in the State of North Carolina on their signs. A further opinion was re-quested
as to whether the State Board would have the discretionary right
to make reasonable rules and regulations regarding such advertising.
G.S. 18-78(d) provides in part:
"The State Board of Alcoholic Control shall have the power to
adopt, repeal and amend rules and regulations to carry out the
provisions of this article and to govern the distribution, merchan-dising
and advertising of wine and malt beverages . . . ."
The statute quoted above clearly gives the Board of Alcoholic Control the
authority to enact rules and regulations dealing with the advertising of
wine and malt beverages. This is not affected, of course, by the exclusionary
provisions in G.S. 18-3 and G.S. 18-52 through 18-55 and 18-60 which
clearly make those advertising regulatory provisions applicable only to
alcoholic beverages with an alcohol content of not more than 3.2% and
14% respectively. Any regulation which the Board might pass could not
override the provisions of G.S. 18-52.
Numerous states have upheld the authority of statutes, local ordinances
or regulations enacted upon proper statutory authority which would regu-late
advertising of alcoholic beverages within the borders of a particular
state. (See Fletcher v Paige, 124 Mont. 114, 220 P.2d 484, 19 A.L.R. 2d
1108 (1950) and the annotation in 19 A.L.R. 2d at p. 1114.) Further, it is
stated in 45 Am. Jur. 2d, Intoxicating Liquors, §236:
"While the manufacture and sale of intoxicating liquors, where
permitted, is a lawful business which is fully entitled to pro-tection,
it is nevertheless regarded as dangerous to public health,
2 ATTORNEY GENERAL OPINIONS [VOL.
safety and morals, and is thus subject to strict regualtion or
control by the states under their police power, which has generally
been held to include the prohibition or regulation of advertising."
(p. 649) V •
The cases in the A.L.R. annotation and in the Am. Jur. note clearly indicate
that a majority of jurisdictions uphold the power of such regulation. Since
our Supreme Court has already indicated that the regulation of alcoholic
beverages is well within the police power of the State {Boyd v Allen, 246
N.C. 150, 97 S.E.2d 864 (1957)), adoption of such regulations by the Board
would be proper. ,
Of course, like any other regulations, they must be reasonable in basis and
if the Board would undertake rather than to outright prohibit advertising
of beer and wine, to select among locations, types of advertising, etc., any
distinctions as to classification of location, types of ad, etc., would have to
be a reasonable classification.
Since the statute allows the Board to make regulations regarding adver-tising,
we were not confronted specifically with the question of whether
these small posters attached to litter cans are billboards or not. Since the
statute deals with "advertising", these posters would clearly come within
the Board's power. It was noted in passing that the few decisions in other
jurisdictions would not seem to apply in the present case to factually
distinguish these small billboards from the large ones.
In summary, the Board has the power reasonably to pass regulations which
would regulate the advertising of beer and wine in the State of North
Carolina and as long as such regulations are reasonable in basis and not
founded on unreasonably arbitrary classifications of location and type of
advertisement and such other classifications as the Board would deem
necessary, such regulations would be valid.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
(Mrs.) Christine Y. Denson,
. Staff Attorney
2 June 1970
Subject: ABC Act; Alcoholic Beverages Defined; Consumption of
Beer on Street Under G.S. 18-51(6)
Requested by: Mr. Norman T. Gibson
Hamlet Town Attorney
Question: Does the term "alcoholic beverages" as used in G.S.
18-51(6) make it unlawful to drink beer on the public
streets of a municipality ?
Conclusion: No.
40] ATTORNEY GENERAL OPINIONS
The term "alcoholic beverages" as used in G.S. 18-51(6), is defined in
G.S. 18-60 to mean alcoholic beverages of any and all kinds which shall
contain more than 14% of alcohol by volume, and does not apply to or
regulate the possession, sale, manufacture or transportation of beer, wines
or ales having a lower alcoholic content.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
3 June 1970
Subject: ABC Act; Beer; Sale, What Constitutes; Power of State
Board of Alcoholic Control to Regulate
Requested by: Mr. Lee P. Phillips
Director of Enforcement
State Board of Alcoholic Control
Questions: (1) Is it a violation of the provisions of Chapter 18 of the
General Statutes for a person operating a commercial
establishment and possessing an on-premises beer permit
to have a door or cover charge per person and then serve
beer to his customers "without charge" ?
(2) Is it a violation of the provisions of Chapter 18 of the
General Statutes for a person or corporation not possessing
an on-premises beer permit to possess beer in the estab-lishment
and give it to customers "without charge"?
Conclusions: (1) It is not a violation of the provisions of Chapter 18
of the General Statutes for a person operating a com-mercial
establishment and possessing an on-premises beer
permit to have a door or cover charge per person and then
serve beer to his customers "without charge".
(2) Whether it is a violation of the provisions of Chapter
18 of the General Statutes for a person or corporation not
possessing an on-premises beer permit to possess beer in
the establishment and give it to customers "without charge"
depends on the factual situation. A sale of beer may be
indirect as well as direct and if the price of the beverage
is hidden in some cover charge, attendance fee, or charge
for some other facility, there would be a sale of beer in
violation of Chapter 18 for failure to possess a permit.
The inquiry of May 20 does not give sufficient facts to determine with any
degree of accuracy the answers to the questions posed in the light of any
specific factual situation.
G.S. 18-64 defines "sale" as "a transfer, trade, exchange or barter in any
manner or by any means whatsoever, for consideration." Thus, one would
have the sale of beer in this context if it could be proven that by some
ATTORNEY GENERAL OPINIONS [Vol.
other charge or fee such as a cover charge for a club, increased meal price
at Br restaurant, greens fee, attendance fee or participation fee for a golf
tournament, or any other charge or fee which evidently was increased in
order to provide "free" beer, there would be a sale for which the establish-ment
would have to possess a permit. For those establishments which do
possess a permit, the fact that the sale was an indirect one would not be a
violation of the law since the permit by its terms authorizes them to
possess beer for the purposes of sale. (Of course, this assumes that the
sale was not to a minor, to a person in an intoxicated condition, or in
violation of an on-premises or off-premises restriction.)
However, where there is no permit for the establishment and it is evident
that there is a charge or a fee in connection with a customer's activities at
the establishment which clearly would cover the cost of the "free" beer,
although such cost is not directly attributed to the consumption of beer,
there would be a sale in violation of G.S. 18-64 in that some consideration
would be provided. Of course, the prima facie presumption of possession
for purchase of sale would be available to the State in these circumstances
so that it would be incumbent upon the establishment to prove that in fact
they were not selling, either directly or indirectly, the beer in violation of
the provisions of Chapter 18.
Robert Morgan, Attorney General
. (Mrs.) Christine Y. Denson,
Staff Attorney
8 July 1969
Subject:
Requested by:
Question:
Conclusion:
ABC Act; Beer and Wine; Elections, Circulation of Peti-tion
and Return Within 90 Days; Discretion of County
Board of Elections to Extend Time
Mr. Homer Haywood, Chairman
Montgomery Board of Elections
Where a petition for a beer and wine election has been
circulated and returned within 90 days to the county board
of elections as required by G.S. 18-124(d), but the petition
was not circulated fully during such period by the pro-ponents
at the request of the county board, may the county
board of elections extend the time for circulating the peti-tion
for an additional period of 30 days ?
Although the language of G.S. 18-124 (d) appears to be
mandatory, it appears that the Supreme Court in Green
V Briggs, 243 N.C. 745, has construed similar provisions
of G.S. 18-124 as being directory only and non-compliance
with the statute will not invalidate the election if the
failure to comply is not prejudicial to anyone, and does not
effect the outcome of the election as in Briggs, supra,
the 90 day provision appears to be for the benefit of the
proponents, thus if the proponents do not object to the
40] ATTORNEY GENERAL OPINIONS
additional time for circulation of the petition for additional
signatures, we do not believe the Court would hold the
subsequent election to be void for that reason. Here, as in
Briggs, the petition was not fully circulated because of
other elections being held and the County Board requested
the delay for this reason in order to conduct the other
elections. This would appear to be a valid reason for the
delay.
Robert Morgan, Attorney General
, James F. Bullock,
Deputy Attorney General
28 May 1969
Subject: ABC Act; Beer and Wine; Elections; Holding County-wide
Election After Municipal Election; Time of Holding
Requested by: Mrs. Margie P. Folger, Executive Secretary
Surry County Board of Elections
Questions: (1) Does the holding of an ABC election in a municipality
under a special act prohibit the holding of a county-wide
referendum under G.S. 18-61 ?
(2) Does the holding of the Mt. Airy election affect the
holding of a county beer and wine election ?
Conclusions: (1) No. Chapter 285, Session Laws of 1963, authorized
Mt. Airy to hold an election to authorize the sale of alco-holic
beverages therein. This Act contains no prohibition
as to the county holding an election to authorize the sale
- of such beverages in the county. Thus, upon request of the
county commissioners, or upon a proper petition, a county-wide
election may be held provided no election has been
held under G.S. 18-61 within three years, and the election
is not held on the day of a biennial county election or
within 60 days thereof.
(2) Yes. A county-wide beer and wine election may not
be held within 60 days of any general, special, or primary
election, unless the petition complies with G.S. 18-124 (f).
The facts presented in a letter dated May 21, 1969, indicate that an election
was held in the Town of Mt. Airy on April 22, 1969, to determine whether
liquor may be sold therein. We assume this election was called pursuant
to Chapter 285, Session Laws of 1963. This Act related only to the Town
of Mt. Airy and placed no limitation upon the right of the county to hold
an election for the sale of liquor under G.S. 18-61. Therefore, the county-wide
ABC election may be held, as provided in G.S. 18-61, if a county-wide
election thereunder has not been held within three years and the election is
not held on the date of any biennial election for county officers or within
60 days thereof.
6
' ATTORNEY GENERAL OPINIONS [VOL,
A county-wide election for the sale of beer and wine may be held, upon
proper petition, unless within three years an election has been held in the
county on the same question, unless the election is held within 60 days of
the holding of any general, special or primary election in the county, or
any municipality thereof.
However, the time restrictions in G.S. 18-124 (f) would not be applicable if
the petition requested that the beer and wine election be held on the same
date as an election on the question of the sale of alcoholic beverages.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
27 May 1969
Subject: ABC Act; Beer and Wine; Elections; Petition; Qualified
Signer
Requested by: Mrs. Margie P. Folger, Executive Secretary
Surry County Board of Elections
Question: Under G.S. 18-124, is it mandatory that the persons sign-ing
the petition must have been registered voters during
the last gubernatorial election?
Conclusion: No. Any qualified and registered voter is eligible to sign
a petition under G.S. 18-124, regardless of the time his
name was placed upon the registration books.
In a letter dated May 23, 1969, it appears that a beer and wine petition has
been circulated in Surry County, and that the name of a person, who was
not registered at the time of the gubernatorial election in 1968 but who
is now registered, appears on the beer and wine petition. Some question
arises as to whether he is a proper signer of the petition.
G.S. 18-124 requires the petition to be signed by 25% of the registered
voters of the county that voted for governor in the last election.
This section was construed in the case of Weaver v Morgan, 232 N.C.
642, wherein it was held that this section does not require that each signer
of the petition must have personally voted for a gubernatorial candidate in
the election, and that the 25% refers to the total number of voters who
voted for governor in the election.
Although the exact question presented in this opinion was not considered
by the Court in the Weaver case, it is our opinion that any qualified
registered voter whose name appears upon the registration book at the
time the petition is circulated is eligible to sign the petition, even though
such person was not registered at the time of the last gubernatorial election.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS
28 May 1970
Subject:
Requested by:
Question:
Conclusion:
29 July 1969
Subject:
Requested by:
Question:
Conclusion:
ABC Act; Beer and Wine; Elections; Sale Not Prohibited
in G.S. 163-272
Mr. A. D. Ward
New Bern City Attorney
Does G.S. 163-272, which prohibits any person to give
away or sell "intoxicating liquors" at any place within five
miles and within 12 hours of any election, prohibit the sale
of beer ?
No. The phrase "intoxicating liquor" as used in the Tur-lington
Act, G.S. 18-1, is broad enough to include beer.
However, G.S. 18-1(3) provides that "this article shall not
make unlawful any acts authorized or permitted by . . .
G.S. 18-63 through 18-92 . . ., the Beverage Control Act of
1939, as amended . . .". G.S. 18-45 requires liquor stores
to be closed on election days. However, we find no pro-vision
of the Beverage Control Act which requires beer
outlets to be closed on election day. "Alcoholic beverages"
as used in Article 2 of Chapter 18, means those beverages
which contain more than 14% of alcohol by volume. G.S.
18-60. Construing the various sections of Chapter 18 to-gether,
it appears that the sale of beer is not prohibited
by G.S. 163-272 in those counties or cities which permit
such sale.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
ABC Act; Beer and Wine; Hours of Sale and Consumption;
Eastern Standard Time
Mr. Broxie J. Nelson
Associate Raleigh City Attorney
Did Chapter 1131, Session Laws of 1969, which amended
G.S. 18-141 by merely adding the words "Eastern Standard
Time" after the hours stated therein, change the hours of
sale and consumption of beer and wine as already re-stricted
in G.S. 18-141, G.S. 18-105, G.S. 18-106 and G.S.
18-107?
Title 15, USCA Sections 260 through 267, has established
Eastern Standard Time in North Carolina. Sec. 260a
merely advances the Standard Time one hour during the
period commencing on the last Sunday in April and ending
on the last Sunday of October of each year. G.S. 18-141
prohibits the sale of beer and wine between the hours of
11:45 P.M. and 7:30 A.M., and prohibits the consumption
8 ATTORNEY GENERAL OPINIONS [VOL.
of these beverages on licensed premises between the
hours of 12:00 Midnight and 7:30 A.M. Chapter 1131,
Session Laws of 1969 merely added the words Eastern
Standard Time after the above stated hours. Since
Standard Time is established by the federal statutes,
Chapter 1131, Session Laws of 1969, did not change the
Standard time, thus it did not affect any change in the
hours of sale or consumption of beer and wine.
The Uniform Time Act of 1966, codified as Title 15 USCA, Sees. 260 et seq.,
establishes the same standard of time throughout each Standard Time Zone.
North Carolina is in the Eastern Standard Time Zone. Sec. 260a of Title 15,
provides that the standard time of each zone shall be advanced one hour
during the April-October period, but authorizes a state to exempt itself
from the advancement of time by appropriate statewide legislation. This
North Carolina has not done.
There is no standard of time designated by or under law as "Daylight
Saving Time". Thus during the April-October period, "Eastern Standard
Time" is merely advanced one hour, but "Eastern Standard Time" is in
effect in North Carolina the entire year. Thus Chapter 1131, Session Laws
of 1969, could not and did not change the standard of time in effect in
North Carolina, and did neither shorten nor extend the period of time in
which beer or wine may be sold and consumed in North Carolina. Neither
did the 1969 Act amend or modify G.S. 18-105 thru 18-107 relating to the
hours of sale and consumption of beer and wine.
Our interpretation has the concurrence of the U. S. Department of
Transportation as revealed by letter of July 23, 1969, which states as
follows
:
"The Uniform Time Act of 1966, section 3, provides that during
the period beginning on the last Sunday in April and ending on the
last Sunday in October, 'the standard time of each zone estab-lished
. . . shall be advanced one hour, and such time as so ad-vanced
shall ... be the standard time of such zone during such
period.' [Emphasis supplied]. According to this language of the
Act, and its legislative history, it has been the consistent position
of the Department of Transportation that all time in all U. S.
zones is 'standard' time. When during the April-October period
the time is advanced one hour, it is still 'standard' time. Neither
the statute nor its legislative history indicates that Congress in-tended
that there be more than one standard of time. There
clearly is no time designated by or under law as 'Daylight Saving
Time'.
"In view of the foregoing, we concur with the last paragraph on
page 1 of your letter and with your interpretation of the Uniform
Time Act and its effect on the North Carolina Statute."
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS 9
19 March 1969
Subject: ABC Act; Beer and Wine; Licenses; Qualification of Ap-plicant
Requested by: Mr. Ray B. Brady, Director
State Board of Alcoholic Control
Question: Is a person who was convicted of a felony in 1961 and who
has not had his citizenship restored under Chapter 13 of
the General Statutes eligible for the issuance of a beer
permit under the provisions of G.S. 18-130.
Conclusion: No. The conviction of a felony in 1961 would not auto-matically
disqualify an applicant; however, since his
citizenship has not been restored G.S. 18-130 would pro-hibit
the issuance of the permit.
The State ABC Board has received an application for a beer permit and
the applicant states therein that he was convicted of a felony in 1961 and
received an active sentence; he states that he has never had his citizenship
restored under Chapter 13 of the General Statutes.
G.S. 18-130, as amenc ed in 1963, requires the applicant to state under oath
that he has not been convicted of a felony within the past three years;
that if he had been deprived of his citizenship, it has been restored by the
court; and, in addition, authorizes the State ABC Board to determine
whether or not any person who has ever been convicted of a felony shall
be deemed as a suitable person to receive and hold a beer permit.
Under the facts presented, the conviction of the felony having been more
than three years prior to receipt of his application by the Board, would
not automatically disqualify the applicant. However, the restoration-of-citizenship
requirement is a separate and individual prerequisite of the
permit, and since the applicant states that his citizenship has not been
restored, the permit could not be issued until the procedure for restoration
of citizenship, as provided in Chapter 13 of the General Statutes, has been
complied with.
Under this section, even where the conviction has been more than three
years prior to the application and even though citizenship has been restored,
the discretion has been placed within the Board to determine whether the
applicant who has been convicted of a felony is a suitable person to receive
and hold a beer permit.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
3 December 1969
Subject: ABC Act; Beer and Wine; Manufacture of Wine in a Dry
County
10 ATTORNEY GENERAL OPINIONS [Vol.
Requested by: Mr. Otto Wells
Assistant Director Enforcement Division
State Board of Alcoholic Control
Question: Is it legal to manufacture those wines defined in G.S. 18-64,
and those authorized in G.S. 18-100, in a so-called "dry
county" where the sale of wine, beer or whiskey is not
permitted? s
Conclusion: Yes. The Turlington Act, as first enacted, prohibited the
manufacture of beer and wine in North Carolina (G.S.
18-1). Later it was amended so as not to make unlawful
(V any acts authorized or permitted by G.S. 18-100 through
G.S. 18-104, authorizing cultivation and manufacture of
light domestic wines; G.S. 18-63 through G.S. 18-92, the
Beverage Control Act of 1939, and the Fortified Wine Con-trol
Act of 1941.
G.S. 18-67 authorizes the brewing or manufacture for sale, those beverages
enumerated in G.S. 18-64. G.S. 18-99.1 authorizes the manufacturing of
fortified wines as defined in G.S. 18-96 and G.S. 18-99.
Although Article 11 of Chapter 18 authorizes elections on the sale of
wine and beer in counties and municipalities, there is nothing in this
Article or any other section of Chapter 18 which indicates that wine may
not be manufactured in a dry area. G.S. 18-99 provides that nothing in
Chapter 18 shall prevent wholesale distributors from possessing, trans-porting,
warehousing or selling, as wholesalers, in any county of the State
provided the sale is to properly licensed persons. Thus it appears that
when a manufacturer has obtained the State license required by G.S. 18-67,
and obtained from the State Board of Alcoholic Control the permits re-quired
by G.S. 18-112, he may locate the winery in any county of the
State and sell to those persons properly licensed under Chapter 18 of the
General Statutes. Of course, should there be a local act expressly pro-hibiting
the manufacture of wine within a county, then such local act
would be controlling.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
27 March 1970
Subject: ABC Act; Beer and Wine; Revocation of Permits Without
a Hearing; Authority of the State Board of Alcoholic
Control
Requested by: Mr. Lee P. Phillips, Director of Enforcement
State Board of Alcoholic Control
Questions: (1) If the State Board of Alcoholic Control, through its
agents, discovers that premises to which a beer or wine
permit has been granted under a corporate name have a
40] ATTORNEY GENERAL OPINIONS 11
new manager or corporate member who has not qualified
under the requirements of the Board for persons handling
beer and wine, do the agents of the State Board of Alco-holic
Control have authority to pick up that permit with-out
affording a hearing to the permittee ?
(2) Where the agents of the State Board of Alcoholic
Control discover that the premises have been abandoned
by the permittee and are now being operated by someone
else who has not been approved, do the agents have the
authority to pick up any permits issued to the former
permittee at those premises without affording a hearing
to the current owner and occupant of the premises?
Conclusions: (1) Agents of the State Board of Alcoholic Control do
not have the authority, without giving the requisite ten
days' notice and opportunity for a hearing, to pick up beer
or wine permits at a location to which the permit has been
issued to a corporation, even though the manager or some
of the corporate members may have changed without ap-proval
by the Board.
(2) Agents of the State Board of Alcoholic Control have
the authority to pick up a permit without notice and hear-ing
at premises which have been abandoned by the per-mittee
and are now occupied by a person to whom a permit
has not been issued for those premises.
In a letter of March 11 the opinion of this Office is requested in two
troublesome areas of enforcement dealing with wine and beer permits.
It was indicated that on occasion State ABC officers discover that an
establishment on which a beer and /or wine permit is held in a corporate
name has changed managers or has changed some of the corporate officers
or directors without the prior approval of the State Board and that the
officers have been hesitant to pick up such permits without affording op-portunity
for a hearing. It was also indicated that on some occasions,
officers will go to premises and find those premises have been abandoned
by the person holding the beer and /or wine permits and are now occupied
by another person purporting to operate under those permits and under
those circumstances you also inquire as to whether or not agents have the
authority to pick up the permits without notice and hearing.
With regard to the former situation, we do not believe that the State
Board or its agents have the authority to pick up a permit without giving
a person the requisite ten days' notice and opportunity for hearing.
G.S. 18-137 provides:
"Before the Board may suspend or revoke a permit issued under
the provisions of this Article, at least ten days' notice of such
proposed or contemplated action by the Board shall be given to the
affected permittee. Such notice shall be in writing, shall contain
12 ATTORNEY GENERAL OPINIONS [VOL.
a statement in detail of the grounds or reasons for such proposed
or contemplated action of the Board, and shall be served on the
permittee by sending the same to such permittee by registered
or certified mail to his last known post office address or by per-sonal
service by an agent of the Board. The Board shall on such
notice appoint a time and place when and at which the said
permittee shall be heard as to why the said permit shall not be
suspended or revoked. The permittee shall at such time and place
have the right to produce evidence in his behalf and to be
represented by counsel."
Thus, the statutory mandate that the Board give notice and hold a hearing
before revoking a permit is clear. In the situation posited, the permittee,
i.e., a corporation, continues to exist but changes officers, directors or a
manager. Although G.S. 18-130(12) clearly gives the Board authority,
upon considering the issuance of a permit, to take into consideration
certain requirements and qualifications of the officers, directors, stock-holders
owning more than 25% of the stock, and managers of the corpora-tion,
once the permit is issued, there is no statutory requirement that
these conditions continue in existence, or that the Board be given prior
notice before they change in order for the permit to continue. Thus, in
effect, as long as the permittee itself continues in existence, revocation or
suspension without notice would be improper and the permittee would have
to be accorded a hearing.
' L
G.S. 18-132.1 contemplates that a new permit would issue with a change in
managers, but that statute deals with application fees and does not give
additional powers to the Board. Proper procedure would be to issue the
Board's show cause order why the permit should not be canceled.
With regard to the second situation, however, it is the opinion of this
Office that the Board's agents have authority to pick up a permit without
notice and opportunity of hearing. In the situation described, the operation
for which the permit was issued, namely to a particular person or corpora-tion
at a particular location, has ceased to exist. Although the location
continues in operation, the person has changed and that person has not
received a permit from the Board. Therefore, the permit is no longer
valid. G.S. 18-129 makes it clear that the Board in considering the fitness
of an applicant for a permit to sell beer and wine shall inquire into the
character of the applicant himself as well as to the location of the place
of business, its general appearance, and type of business. Thus, there are
really two criteria: First, whether the person making the application, or
the corporation, is suitable to hold a permit and, secondly, whether the
premises are a proper place to which a permit should be issued. The
permit is, therefore, issued on two conditions, that is, that the person
continues to operate and that he continues to operate at that location.
When either one of those conditions—in this case, the person—ceases to
exist, then the permit is no longer valid. The agents of the Board may,
40] ATTORNEY GENERAL OPINIONS 13
therefore, pick up such permits without hearing and notice to the person
then occupying and operating the premises.
Robert Morgan, Attorney General
James Bullock,
Deputy Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
28 February 1969
Subject: ABC Act; Beer and Wine; Sunday Sales; Regulation by
County
Requested by: Mr. W. W. Speight
Pitt County Attorney
Questions: (1) May the county prohibit all Sunday sales of beer
except in a private country club ?
(2) May the county prohibit all Sunday sales of beer ex-cept
in restaurants and clubs having brown-bagging per-mits?
Conclusion: No. Although the board of county commissioners has the
authority to regulate and prohibit the sale of beer on
Sunday, the ordinance must be uniform and affect all
persons similarly situated or engaged in the same business
without discrimination.
Pitt County has adopted an ordinance under G.S. 18-107 prohibiting the
sale of beer throughout the County from 11:45 p.m. on Saturday to 7:30
a.m. on the folllowing Monday.
A private country club, having a brown-bagging permit, desires to sell
beer on Sunday to its guests and members. This situation gives rise to
the questions above.
All beer licensees are authorized to sell beer, even on Sunday, so long as
they do so in compliance with the law governing such sales. G.S. 18-105;
Davis V Charlotte, 242 N.C. 670. The County's authority is limited by
G.S. 18-107 to regulating and prohibiting sales on Sunday.
In Davis v Charlotte, 242 N.C. at 674, it is said:
"A municipal corporation is a creature of the General Assembly.
Ward V Elizabeth City, 121 N.C. 1, 27 S.E. 993. Municipal
corporations have no inherent powers but can exercise only such
powers as are expressly conferred by the General Assembly or
such as are necessarily implied by those expressly given. S v Ray,
131 N.C. 814, 42 S.E. 960; S v McGee, 237 N.C. 633, 75 S.E.2d 783.
" 'Municipal ordinances are ordained for local purposes in the ex-ercise
of a delegated legislative function, and must harmonize with
the general laws of the State. In case of conflict the ordinance
must yield to the State law.' S v Freshwater, 183 N.C. 762,
111 S.E. 161, and cases cited therein. A decision of this Court in
14 ATTORNEY GENERAL OPINIONS [VOL.
1883 applied this well established principle when there was con-flict
between a general State statute and a municipal ordinance
of the City of Goldsboro, both dealing with the sale of intoxicating
liquor on Sunday. S v Langston, 88 N.C. 692.
"It may be conceded that the City of Charlotte, under its charter
provisions and under G.S. 160-52 and G.S. 160-200(6) (7) (10),
had implied authority to adopt the ordinance in controversy in
the absence of legislation enacted by the General Assembly
dealing directly with the subject. Bailey v Raleigh, 130 N.C.
209, 41 S.E. 281; Paul v Washington, 134 N.C. 363, 47 S.E. 793.
But it is quite plain that the City of Charlotte cannot, by ordinance,
make criminal or illegal any conduct that is legalized and sanc-tioned
by the General Assembly. The ordinance, to the extent it
conflicts with the general State law, is invalid."
In S V McGee, 237 N.C. at page 639, the Supreme Court wrote:
"It is a fundamental rule that the governing body of a munici-pality,
clothed with power to enact and enforce ordinances for the
observance of Sunday, 'is vested with discretion in determining the
kinds of pursuits, occupations, or businesses to be included or ex-cluded,
and its determination will not be interfered with by the
courts provided the classification and discrimination made are
founded upon reasonable distinctions and have some reasonable
relation to the public peace, welfare, and safety.' 50 Am. Jur.,
Sundays & Holidays, section 11, page 810.
"Barnhill, J., in speaking for this Court in S v Trantham, 230
N.C. 641, S.E.2d 198, said: 'Legislative bodies may distinguish,
select, and classify objects of legislation. It suffices if the classifica-tion
is practical. Magoin v Bank, 170 U.S. 283, 42 L Ed 1037;
S V Davis, supra. They may prescribe different regulations for
different classes, and discrimination as between classes is not such
as to invalidate the legislative enactment. Smith v Wilkins, 164
N.C. 135, 80 S.E. 168. The very idea of classification is inequality,
so that inequality in no manner determines the matter of con-stitutionality.
Bickett V Tax Commission, 177 N.C. 433, 99
S.E. 415; R.R. v Matthews, 174 U.S. 96, 43 L Ed 909. The one
requirement is that the ordinance must affect all persons similarly
situated or engaged in the same business without discrimination.
City of Springfield v Smith, 322 Mo. 1129.' "
The business which the county ordinance would regulate is that of selling
beer. Thus, an ordinance prohibiting all beer licensees, except restaurants
and country clubs, from selling on Sunday would violate the cardinal re-quirement
that it must affect all persons engaged in the same business
without discrimination. See S v Scoggin, 236 N.C. 1.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
40] ATTORNEY GENERAL OPINIONS 15
2 October 1969
Subject: ABC Act; Beer and Wine; Sunday Sales; State ABC Board
Regulations; Power of Municipalities
Requested by: Mr. Daniel A. Manning
Williamston Town Attorney
Question: Can a town validly authorize the sale of wine on Sundays
under G.S. 18-107?
Conclusion: A municipal ordinance authorizing Sunday sales of wine
would be invalid as conflicting with Part 3, Section 5(c)
of the Wine Regulations of the North Carolina Board of
Alcoholic Control.
G.S. 18-107 states:
"In addition to the restrictions on the sale of beer and /or wine
set out in G.S. 18-105, the governing bodies of all municipalities
and counties in North Carolina shall have, and they are hereby
vested with, full power and authority to regulate and prohibit the
sale of beer and/or wine from 11:45 P.M. on each Saturday until
7:30 A.M. on the following Monday.
"The power herein vested in governing bodies of municipalities
shall be exclusive within the corporate limits of their respective
municipalities, and the powers herein vested in the county commis-sioners
of the various counties in North Carolina shall be exclusive
in all portions of their respective counties not embraced in the
corporate limits of municipalities therein."
However, Part 3, Section 5(c) of the Wine Regulations relating to the
retail distribution and sale of wine of the North Carolina Board of
Alcoholic Control states:
"No wine shall be sold between the hours of 11:45 p.m. and 7:30
a.m. and wine shall not be sold during any hours on Sunday or
Election days. In cases where local ABC Boards restrict the hours
of sale more stringently than above, the hours set by said local
ABC Boards shall apply."
The town attorney states as follows:
"Since the above statute seems to be in conflict with the regula-tion
of the North Carolina Board of Alcoholic Control, a ruling
of the Attorney General is requested on the question of whether
or not the Town can enact an Ordinance pursuant to General
Statute 18-107 permitting the limited sale and purchase of wine
on Sundays."
A study of the history of the statutes and regulations resolves the ap-parent
conflict. Wine sales were originally authorized on Sunday through-out
the State, except that G.S. 18-107 authorized cities within corporate
limits and counties outside corporate limits to regulate or prohibit Sunday
sales of wine.
16 ATTORNEY GENERAL OPINIONS [Vol.
G.S. 18-107 was originally enacted in 1943. A 1947 amendment to G.S.
18-109, which is now incorporated in G.S. 18-109(7) (c), gave the State
Board of Alcoholic Control absolute authority, in its discretion, to fix all
hours of sale of wine in all counties and municipalities in which such sale
is permitted. Pursuant to this latter statute, the above quoted statewide
regulation was adopted by the State Board and, therefore, a municipality
does not at present have any authority to legalize Sunday sales of wine.
(This regulation does not affect municipal or county regulation of Sunday
sales of beer.)
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
24 June 1969
Subject: ABC Act; Brown-bagging Permits; Civic Club Holding
Dance in Warehouse Open to Public
Requested by: Mr. W. C. Cohoon, Chairman
State Board of Alcoholic Control
Question: Is it legal for persons to "brown-bag", with or without
permit, in a private warehouse rented to a civic club for
the purpose of holding a dance when the public is generally
in attendance and admission is by ticket sold in advance
and at the door ?
Conclusion: No. Under G.S. 18-51, liquor may be possessed and con-sumed
only in those places authorized by law. A tobacco
warehouse being used by a club for a dance to which the
general public is admitted by sale of tickets does not
qualify as a place for which a license may be issued for
"brown-bagging," and it is not a "private property," not
open to the general public where a person, his family and
bona fide guests may consume alcoholic beverages.
From information furnished, it appears that a civic club plans to hold a
dance in a tobacco warehouse which is furnished the club free of charge
except for fire and liability insurance. The general public is invited and
tickets are sold in advance by members of the club and friends, and
tickets are sold at the door. The club desires to know if those in attendance
may bring their own alcoholic beverages and if "setups" may be furnished
by members of the club.
G.S. 18-51 provides that any person at least 21 years of age may possess
for lawful purposes alcoholic beverages not in excess of one gallon, pro-vided
it is purchased, possessed and consumed in accordance with law.
Under the statutes, a person may possess and consume such beverages in
his private residence, the residence of another with permission, in a hotel
or motel room rented by the person or to which he may be invited, or any
place of secondary residence with permission of the owner.
40] ATTORNEY GENERAL OPINIONS 17
In addition, such beverages may be possessed and consumed, but not in
view of the general public, on any other private property not primarily
engaged in commercial entertainment and not open to the general public
at the time, and when the express permission of the owner or person in
possession has been obtained, and when the beverage is consumed by the
person, his family or bona fide guests of the person or of the association
or corporation.
It is clear that under the facts presented alcoholic beverages may not be
possessed or consumed in the tobacco warehouse, which is open to the
public, in view of the general public, and engaging in commercial enter-tainment
at the time.
It is equally clear that, under the facts, the warehouse cannot qualify as
a social establishment, restaurant or related place, or as a "special oc-casion"
where a permit for brown-bagging may be issued.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
25 February 1969
Subject: ABC Act; Contracts; Authority of County ABC Board to
Execute Lease Agreement
Requested by: Mr. Rom B. Parker
Halifax County Attorney
Question: May a county ABC board execute a rental agreement for
a term of 20 years, subject to cancellation only if the
voters of the county vote against ABC stores in the
county ?
Conclusion: Although a county ABC board may execute a rental con-tract
for a term of years, such contract cannot bind
successor boards in matters of governmental discretion.
The facts presented in a letter of February 12, 1969, indicate that the
Halifax County ABC Board desires to rent a building from a corporation
for the purpose of operating an ABC store. The corporation insists upon
a minimum term of 20 years, and will not accept a cancellation clause
except the voting out of ABC stores in Halifax County by the voters
thereof.
A county ABC board has the authority to lease property for the purpose
of storing and selling alcoholic beverages in the county. G.S. 18-45(8).
In Plant Food Co. v Charlotte, 214 N.C. 518, the Supreme Court, in
speaking of contracts binding successor boards and commissions, wrote as
follows
:
"Where governmental powers of this kind are not involved or dis-advantageously
affected the right to make contracts, otherwise
unobjectionable to the law, is one of the most important incidents
18 ATTORNEY GENERAL OPINIONS [VOL.
of municipal government. Lambeth v Thomasville, 179 N.C. 452,
102 S.E. 775. In the administration of its proprietary affairs
the commissioners or councilmen of the town may make reason-able
contracts binding upon their successors running through a
term of years.
"The line between powers classified as governmental and those
classified as proprietary is none too sharply drawn, and is subject
to a change of front as society advances and conceptions of the
functions of government are modified under its insistent demands.
And it may be said that with respect to the making of contracts
the inhibition does not strictly apply where governmental discre-tion
as to the performance of the particular act is no longer
necessary.
"It is not to be supposed that because the general subject may
belong to the field of governmental powers no detail of administra-tion
may be carried out by contract, or that such contract must
be completed within the term of the contracting council. The true
test is whether the contract itself deprives a governing body, or
its successor, of a discretion which public policy demands should
be left unimpaired. It is obvious that a too rigid adherence to the
principle would leave the town council nursing a mere theory, in
the possession of an important governmental power without
practical means for its exercise, and unable to undertake any im-portant
public work, since no concern would equip itself and
undertake the project when the incoming administration, the
product perhaps of political accident, might repudiate the contract
at will during its performance."
G.S. 18-45(16) authorizes county ABC boards to discontinue the operation
of any store when it appears that the operation is not sufficiently prof-itable
to justify its operation; or when in the board's opinion the opera-tion
of the store is inimical or hurtful to the morals or welfare of the
community; or when directed by the State ABC Board to close the store.
G.S. 18-39(10) gives the State ABC Board the authority to approve the
location of county stores, and to close any county store for any cause
which appears sufficient to the State Board.
The proposed lease contract would attempt to bind both the State ABC
Board and successor county boards' authority to exercise governmental
discretion in closing the store or discontinuing its operation; thus, the
present board could not make such a contract as to bind successor boards.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
6 June 1969
Subject: ABC Act; County ABC Board; Term of Chairman Fixed
by G.S. 18-41
40] ATTORNEY GENERAL OPINIONS 19
Requested by: Mr. E. R. Woodard
Currituck County Attorney
Question: May the composite appointive boards name another mem-ber
of the county ABC board as chairman after the chair-man
has served one year of his three-year term?
Conclusion: No. G.S. 18-41 fixes the original and successor terms of
the chairman of a county ABC board at three years.
Should a vacancy occur before expiration of the chairman's
term, his successor is appointed for the unexpired portion
of the term.
The terms of the members of a county ABC board are staggered under
G.S. 18-41 so that, after the initial terms, one successor will be elected
each year and all successors serve for three-year terms. The statute ex-pressly
fixes the term of the chairman for three years and provides that
should a vacancy occur, the person appointed serves for the unexpired term.
Thus, every three years the composite boards will have an opportunity to
appoint a chairman. The statute contains no authority to change the
chairmanship from one member to another during the term for which the
chairman has been appointed. If, at the expiration of the chairman's term,
the composite board decided to appoint one of the two other board mem-bers
as chairman, such board member should resign. He could then be
appointed chairman for a three-year term, and the composite board could
appoint some person to fill the unexpired term of the member who
resigned.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
18 June 1969
Subject: ABC Act; Distribution of Funds for Law Enforcement
Purposes; City of Whiteville
Requested by: Mr. Benton H. Walton, III
Whiteville City Attorney
Question: Under Chapter 540, Session Laws of 1967, is the City of
Whiteville entitled to receive not less than 5% and not
more than 10% of the gross revenues for law enforcement
purposes ?
Conclusion: Yes. Section 6 of Chapter 540, Session Laws of 1967,
specifically provides that the Municipal Board of Alcoholic
Control shall allocate and disburse not less than 5% and
not more than 10% of the gross revenues to the general
fund of the municipality to be used for law enforcement
purposes.
From the facts presented in a letter of June 14, 1969, it appears that the
ABC Board of Whiteville has taken the position that since G.S. 18-45(15)
20 ATTORNEY GENERAL OPINIONS [Vol.
is not applicable to the municipal boards of alcoholic control, that the City
is not entitled to the 5-10% allocated to the municipality's general fund
for law enforcement purposes.
G.S. 18-45(15) authorized county ABC boards, and in the case of special
acts, municipal ABC boards to expend not less than 5% nor more than
10% of the total profits for law enforcement and authorized the ABC
boards to appoint ABC officers directly responsible to the boards for the !
enforcement of prohibition laws.
Chapter 540, Session Laws of 1967, in Section 5 thereof, specifically
provides that G.S. 18-45(15) shall not apply to municipal boards of
alcoholic control established pursuant to this special act.
Section 6 of Chapter 540 requires the ABC board to allocate and disburse,
by quarterly audit, not less than 5% and not more than 10% of the gross
revenues to the general fund of the municipality to be used for law en-forcement
purposes.
The clear legislative intent of Chapter 540 is that the municipal ABC
board would not have the authority to employ ABC officers and to expend
funds for that purpose; but in lieu thereof, the amount specified in the
act is paid into the general fund of the municipality for the express
purpose of law enforcement.
Thus, the City would be entitled to the amount specified in the act and
may use such funds for law enforcement purposes in the municipality.
Robert Morgan, Attorney General
James F. Bullock,
I
• Deputy Attorney General
7 August 1969
Subject: ABC Act; Taxation; Manufacturer's License; Beer Brewed
by Resident Brewer and Shipped into State for Trans-shipment
to Dealers in this State
Requested by: Mr. W. C. Cohoon, Chairman
State Board of Alcoholic Control
Question: May a firm licensed under G.S. 18-67 to manufacture beer
in this State, receive in this State beer for transshipment
to wholesale dealers in this State, which it has manu-factured
in another State, under authority of its resident
manufacturer's license ?
Conclusion: A firm licensed under G.S. 18-67 to manufacture beer in
this State, may receive in this State beer for transship-ment
to wholesale dealers in this State which it has manu-
. factured in another State, under authority of its resident
manufacturer's license, but only if it is actually engaged
in the manufacture of beer in this State.
40] ATTORNEY GENERAL OPINIONS 21
G.S. 18-67 requires a brewer or manufacturer of beer to obtain an annual
license from the Commissioner of Revenue in order to engage in the
brewing or manufacture of beer in North Carolina. A brewer, so licensed,
also maintains a brewery in another State, and it wishes to ship from
that brewery certain of its brands to its brewery in North Carolina, for
further transshipment to wholesale dealers in the State, in the same
manner that it makes shipments of beer brewed by it in North Carolina.
The question has arisen whether it may do so under the authority of its
resident brewer's license obtained under G.S. 18-67.
Prior to 26 June 1969, there could have been substantial doubt that it
could have done so. It is likely that it would have been necessary for
such brewery to first obtain a wholesaler's license under G.S. 18-69, not-withstanding
the provision in G.S. 18-67 that "no other license tax shall
be levied upon the business taxed in this section." This language had to
do with a tax upon the business of "brewing or manufacture of beverages
... in this State . . ." G.S. 18-67. No prohibition was placed upon the levy
of any other "business" of the brewer, if any, such as selling at wholesale
or retail. Only where the brewer received beer manufactured by it in
another state "for transshipment to dealers in other states" was it
authorized to receive such beer under its resident manufacturer's license.
However, G.S. 18-67 as amended by Chapter 1057 of the Session Laws of
1969 (ratified 26 June 1969) now provides that "when a licensed resident
manufacture . . . procures proper license under this section, it may receive
the (beer) . . . manufactured by it at some point outside this State but
within the United States, for transshipment to dealers in this or other
states, provided that such resident manufacturer is actually engaged in
the manufacturing in this State of (beer)." Thus, if a resident manu-facturer
(1) obtains a license under G.S. 18-67 and (2) actually engages
in the manufacture of beer, it may receive beer manufactured by it in
another state, for transshipment to dealers in this State, under its resident
manufacturer's license, and without the necessity of obtaining any other
license to do so.
Robert Morgan, Attorney General
Myron C. Banks,
Assistant Attorney General
5 December 1969
Subject: ABC Act; Transporting Liquor; Taxicab
Requested by: Representative Ernest B. Messer
Question: Does G.S. 18-51, as amended by Chapter 1018, Session
Laws of 1969, permit a taxicab to transport more than
one passenger at a time when the amount of liquor owned
and possessed by the passengers exceeds one gallon?
Conclusion: Yes. For example, if there are five bona fide paying
passengers, each may possess, in the passenger area of
the taxi, one gallon of liquor so long as it was his own
22 ATTORNEY GENERAL OPINIONS [VOL.
liquor and had not been opened, not for sale or barter,
and is being transported to and from a place where the
beverage may be lawfully possessed or consumed, and the
passenger is at least 21 years of age.
G.S. 18-51 authorizes any person who is at least 21 years of age to possess
and transport alcoholic beverages, not in excess of one gallon, for lawful
purposes. If the cap or seal on a container has been opened or broken, it
may not be transported in the passenger area of any motor vehicle. G.S.
18-51(1), as amended, makes it unlawful for any person operating a for
hire vehicle to transport liquor except when the vehicle is actually trans-porting
a bona fide passenger who is the actual owner of the liquor and
it is transported by each passenger in the amount and manner authorized
by G.S. 18-51.
, Robert Morgan, Attorney General
' James F. Bullock,
Deputy Attorney General
15 October 1969
Subject: ABC Act; Wine; Authorization to Sell 14% Wine
Requested by: Mrs. Winifred T. Wells
Wallace Town Attorney
Question: Under what authority may the sale of 14% wine be
legalized in the Town of Wallace ?
Conclusion; Under the authority of G.S. 18-127, where a municipality
has legalized the sale of beer and where ABC stores have
been established in the municipality, a town may, pursuant
to the authority of G.S. 18-120, authorize the sale of 14%
wine.
The Town of Wallace now has ABC stores located within its boundaries
and in an election has legalized the sale of beer within the town. The
sale of 20% wine is automatically established in municipalities where
ABC stores are located. G.S. 18-96 defines "fortified wines" as those having
a greater percentage of alcohol than 14%. Thus, the 14% wine apparently
can be sold in a municipality when authorized pursuant to G.S. 18-120.
,. . Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
,
'~ Staff Attorney
40] ATTORNEY GENERAL OPINIONS 23
3 February 1970
Subject:
Requested by:
Questions
:
ADMINISTRATION OF ESTATES
Administration of Estates; Administrator, Necessity of;
Bond Requirements; Joint Bank Accounts
Honorable Everitte Barbee
Clerk of Superior Court of Onslow County
(1) In an intestate estate, consisting of three joint bank
accounts with right of survivorship with balances respec-tively
of over $500, over $8,000 and over $3,300; two auto-mobiles
in the name of the decedent only with an aggregate
value of $2,300; a $10,000 life insurance policy payable to
the spouse; and outstanding indebtednesses consisting of
$1,200 in funeral bills, an undertermined amount of in-heritance
tax and miscellaneous debts totaling approxi-mately
$200; must an administrator be qualified?
(2) Under the facts stated in Question 1, should the
amount of the bond required of an administrator be based
on an aggregate sum to include one-half the value of the
joint bank accounts balances plus all the personal property
owned solely by the decedent ?
(3) Where a deceased testator's will gave his wife all his
household furnishings and personal eff'ects and his children,
naming each child, to share and share alike all of his
money and the only money is in joint bank accounts with
rights of survivorship with his wife as in Question 1, does
the joint bank account contract giving the survivor the
right of survivorship prevail leaving the children with no
money ?
(1) Yes. An administrator must qualify in a case such
as the one stated.
(2) The amount of the bond should be based on the
amount of the decedent's personal property which will pass
into the hands of the personal representative including
one-half the unwithdrawn balance in a joint bank account
with right of survivorship.
(3) The survivorship contracts in joint bank accounts
with right of survivorship ordinarily will control the dis-position
and passing of assets in such a joint bank account,
notwithstanding the terms of any will of the decedent joint
account holder.
G.S. 28-3 requires that any person entering upon the administration of a
decedent's estate must obtain letters of administration. In G.S. 28-68, there
is authority for debts owing a decedent to be paid directly to the clerk of
superior court if the amount owed does not exceed $1,000 and if all
Conclusions
:
24 ATTORNEY GENERAL OPINIONS [VOL.
amounts to be paid into the clerk aggregate less than $1,000. Where the
total amount paid into the clerk exceeds $1,000, "the clerk shall appoint
an administrator" G.S. 28-68(c), (emphasis added). In G.S. 28-68.2, there
is authority for the clerk without appointment of an administrator to
disburse money received pursuant to G.S. 28-68 for certain enumerated
purposes
;
—to pay the surviving spouse's and children's year's allowances,
—to pay funeral expenses up to $600, and
—to pay hospital, medical and doctor's bill for the period of the
decedent's last illness, not exceeding 12 months.
The remainder of any funds paid in pursuant to G.S. 28-68 would be paid
over to the surviving spouse, if any, or to heirs or distributees.
The authority conferred on the clerk by G.S. 28-68 and 28-68.2 is limited
to the maximum amount of $1,000 in total receipts and to the amount of
the total receipts received under G.S. 28-68 for any disbursements. Further,
authority for payment of funeral expenses without an administrator is
limited in amount to $600. These circumstances taken together demonstrate
that the estate in question does not fall within the terms of G.S. 28-68 and
28-68.2 as an exception to the general mandate of G.S. 28-3. No other ex-ception
appears applicable.
Concerning the basis for computing the amount of the administrator's
bond, the statute uses the term "double the value of all the personal
property of the deceased" (G.S. 28-34). It also provides for an increase
in the bond where the real estate is required to be sold to make assets
to pay debts (where personalty in the hands of the administrator is in-sufficient).
The purpose of the bond is to protect the estate and its bene- ,
ficiaries from misuse or dissipation in the hands of the personal representa-j
tive. Assuming that these three bank accounts are executed in conformity '
with the terms of G.S. 41-2.1 and have a valid contract of survivorship,
the moneys contained therein would pass to the joint tenant according to
the terms of G.S. 41-2.1, subject only to the conditions contained in that
statute.
G.S. 41-2.1 (b)(3) states:
"Upon the death of either or any party to the agreement, the
survivor, or survivors, becomes the sole owner, or owners, of the
entire unwithdrawn deposit subject to the claims of the creditors
of the deceased and to governmental rights in that portion of the
unwithdrawn deposit which would belong to the deceased had said
unwithdrawn deposit been divided equally between both or among
all the joint tenants at the time of the death of said deceased."
(Emphasis Added).
While G.S. 41-2.1(b)(3) provides the substantive rights of the parties in
the unwithdrawn deposit in a survivorship situation; G.S. 41-2. 1(b) (4)
provides the mechanics. It states:
i
"Upon the death of one of the joint tenants provided herein the
j
banking institution in which said joint deposit is held shall pay
40] ATTORNEY GENERAL OPINIONS 25
to the legal representative of the deceased, or to the clerk of the
superior court if the amount is less than one thousand dollars
($1,000), in accordance with G.S. 28-68, the portion of the unwith-drawn
deposit made subject to the claims of the creditors of the
deceased and to governmental rights as provided in subdivision
(3) above, and may pay the remainder of the surviving joint
tenant or joint tenants. Said legal representative shall hold the
portion of said unwithdrawn deposit paid to him and not use the
same for the payment of the claims of the creditors of the de-ceased
or governmental rights unless and until all other personal
assets of the estate have been exhausted, and shall then use so
much thereof as may be necessary to pay any remaining debts
of the deceased or governmental claims. Any part of said unwith-drawn
deposit not used for the payment of such debts or charges
of administration of the deceased shall, upon the settlement of the
estate, be paid to the surviving joint tenant or tenants."
There appears to be little doubt that except in cases within the purview
of G.S. 28-68 and 28-68.2, there is a requirement for a fractional portion
of the unwithdrawn balance to be paid to the personal representative and
to be held by him for the payment of claims of the creditors of the de-ceased
and the payment of governmental rights. The statutory language,
"the portion of the unwithdrawn deposit made subject to the claims of
creditors of the decreased and to governmental rights as provided in sub-division
(3) above," makes it clear that the entire one-half (in the husband
and wife situation) is the portion subject to these claims. Accordingly, it
would appear that in each two-depositor joint bank account situation,
one-half of the account may be paid immediately to the surviving joint
tenant. The remaining one-half of each account shall be paid to a personal
representative who is then obliged to hold these amounts as a fund from
which personal debts of the deceased joint tenant may be satisfied if all
other personal property is exhausted and from which government rights
are to be satisfied. Accordingly, the amount of bond should be based upon
all funds coming into the hands of the personal representative. This would
necessarily include, in our case, the two automobiles, one-half of the three
joint bank accounts and any cash or other personal property on hand.
The amount of the debts would not figure into the computation of the bond
unless the debts exceeded the amount of personal property and required
the liquidation of real estate in order to make assets, in which case, G.S.
28-34 would require an upward adjustment of the bond amount.
In North Carolina, the right to survivorship in joint bank accounts
established by written agreement is established by G.S. 41-2.1. In inter-preting
that statute, where other principles are not stated in the text of
the statute, the common law will govern.
"Under common law principles applicable to joint tenancies, the
survivor takes the entire property free and clear of claims or
creditors of the deceased tenant. This is the common law rule in
North Carolina; and in the absence of statute, it has been applied
26 ATTORNEY GENERAL OPINIONS [VOL.
in respect to a joint bank account where the parties had agreed
to the right of survivorship." See Lee, NC Law of Personal
Property, Section 63; citing Wilson County v. Wooten, 251 NC 667.
Pertinent to your particular question, the Wooten case sets out the rule
that
"Where two persons sui juris enter into a contract that funds on
deposit in their joint bank account should constitute a joint
tenancy with right of survivorship, such contract is effective and
the survivor is entitled to the funds free from the claims of the
heirs or personal representative or creditors of the deceased tenant
in the absence of fraud." See 1 Strong, NC Index 2d; Banks,
Section 4, page 651. The express terms of G.S. 41-2.1 are the only
limitation to this rule.
Consistent with the common law theory of joint tenancy with right of
survivorship enunciated in the Wooten case, the direction stated in the
list sentence of G.S. 41-2. 1(b) (4) is clear and unequivocal.
"Any part of said unwithdrawn deposit not used for the payment
of such debts or charges of administration of the deceased shall,
upon the settlement of the estate, be paid to the surviving joint
tenant or tenants."
Robert Morgan, Attorney General
Sidney S. Eagles, Jr.,
Assistant Attorney General
13 October 1969 -
Subject: Administration of Estates; Administrator; Right of Minor
Widow to Nominate Administrator
Requested by: Honorable Edgar W. Tanner
Rutherford Gouty Clerk of Superior Court
Question: Does the widow of the deceased, who is a minor, have the
right to nominate someone to serve as administrator of
her deceased husband's estate ?
Conclusion: A widow, who is a minor, does have the right to nominate
someone to serve as administrator of her deceased hus-band's
estate.
Your telephone inquiry indicated that the deceased husband, himself a
minor, was killed and left a minor widow and one child. The father of
the deceased has qualified as administrator but now the widow has indicated
that she wants her mother to qualify as administratrix of the husband's
estate.
The Supreme Court specifically said in Wallis v Wallis, 61 N.C. 78 (1863),
where the widow is 17 that, although a minor may not serve, the Court
"might have granted the administration to such person as she should
appoint." The Supreme Court cited two cases for authority on that point.
One of them does not deal with that issue. The other one, Ritchie v
McAuslin, 2 N.C. 220 (1795), dealt with the situation where the next of
40] ATTORNEY GENERAL OPINIONS 27
kin were out of the country and wanted to appoint someone else. The
Court indicated in that situation that the nomination by the next of kin
amounted to the exercise of a right and that it was incumbent on the
Court to repeal the previously issued letters of administration and appoint
the next of kin's nominee. However, in another case dealing with non-resident
next of kin the Supreme Court in Little v Berry, 94 N.C. 433
(1886) indicated that the court might issue letters to the nominee if it
wished to do so. In the case of Williams v Neville, 108 N.C. 559 (1891),
the Court indicated that the next of kin "had the right ... to select and
recommend such person as she might prefer if she did not wish to ad-minister
herself and if her nominee was suitable in character, habits and
; intellect to demand appointment." Again, the language in the Williams
case seems to indicate that it would be mandatory for the clerk to issue
I
letters to the proper nominee.
I
In 1912 the Supreme Court decided Boynton v Heartt, 158 N.C. 488 (1912).
The Court indicates that the statutes on nonresident administrators was
changed to forbid the service of nonresident administrators. Further, the
Court points out that there is no statute specifically allowing persons to
nominate another to serve in their position as administrator. The Court
says at page 493:
"While, as we have said, there is authority to the contrary, the
better view, as we think, is that the right to nominate depends
on the right to administer."
The Court concludes on pages 494-495 that since a nonresident is in-competent
to administer the estate, he is also incompetent to nominate
someone else to serve. By way of distinguishing this decision from the
situation where a minor is involved, the Court says at page 495:
"If, however, the law is stated correctly in the Wallis case,
there is a distinction between the disqualification on account of
nonage and nonresidence because in the first, the right to ad-minister
continues to exist while the exercise of the right is
suspended during minority, and in the case of a nonresident, he
has never had the right to administer."
The right to nominate has been further delineated in In Re Estate of
Smith, 210 N.C. 622 (1936). There the Court held that a person may not
exercise the right to nominate if someone of equal or closer degree of
kinship is willing to serve.
It is clear that the young widow may not serve as administratrix. (G.S.
28-8(1)). However, her right to administer is primary and higher than
that of the deceased's parent. (G.S. 28-6(a)(l)). It would therefore appear
in the light of the case law on the subject that the right of a minor widow
to nominate someone to serve in her stead exists and would take precedence
over the wish of the parent to administer the estate.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
28 ATTORNEY GENERAL OPINIONS [Vol.
12 September 1969
Subject: Administration of Estates; Administrators; Final Accounts
of Co-Administrators
Requested by: Honorable George M. Harris
Clerk of Superior Court
Caswell County
Question: Where four co-administrators have been appointed by the
clerk, may the clerk approve a final account signed by
only three of the four co-administrators ?
Conclusion: Yes.
Pursuant to G.S. 28-6(2), the Clerk of Superior Court of Caswell County
appointed four children of an intestate as co-administrators. Three of the
four co-administrators have prepared and submitted to the Clerk for the
Clerk's audit a final accounting. The other co-administrator refuses to sign
the final account. The final account appears to the Clerk to be proper in
all respects.
G.S. 28-184.1 provides, in part:
"(a) As used in this section, the term 'personal representatives'
includes executors, administrators, administrators c.t.a., admini-strators
d.b.n., collectors, and testamentary trustees.
. . . "(e) Subject to the provisions of subsections (b), (c) and
(d) of this section, all other acts and duties must be performed
by both of the personal representatives if there are two, and by a
majority of them if there are more than two."
Subsections (b), (c), and (d) are not relevant here. The filing of a final
account is "another act and duty" within the meaning of subsection (e).
The implication is clear that a majority of co-administrators has authority
to file a final account.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
25 June 1969
Subject:
Requested by:
Question:
Conclusion
:
Administration of Estates; Bond of Substitute or Successor
Administrator
Honorable Ben G. Floyd, Jr.
Clerk of Superior Court, Robeson County
When the administrator of an estate ceases to function
and the widow is appointed administrator de bonis non,
is she required to post a separate bond from that posted
by the original administrator ?
Each administrator or executor in an estate is required to
post a separate bond.
40] ATTORNEY GENERAL OPINIONS 29
In your inquiry you indicate that the deceased left a widow and an adult
unmarried son, that the widow renounced her right to qualify and the son
became administrator, posting required bond. Subsequently, the son died
and the widow now wants to qualify as administrator de bonis non.
G.S. 28-40 requires that:
"Before letters testamentary, letters of administration with the
will annexed, letters of administration or letters of collection are
issued to any person, he must give the bond required by law . . . ."
G.S. 28-34 contains the requirements as to such bonds. Since bonds are
given in the name of the individual qualifying as administrator as required
by the statutes and since the sureties remain liable on the bond of the
original administrator for such time as the statute of limitations may
provide, it is necessary for each new administrator to secure a separate
bond.
Of course, nothing would prevent the use of the same sureties if the other
requirements of the law are complied with.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
15 August 1969
Subject: Administration of Estates; Bonds, Executors, Administra-tors
and Trustees
Requested by: Honorable Glenn L. Hammer
Clerk of Superior Court
Davie County
Question: Is an individual who seeks to qualify before a clerk of
superior court as a testamentary trustee under the pro-visions
of G.S. 28-53 required to give bond for the faithful
performance of his duties ?
Conclusion: An individual who qualifies as a testamentary trustee is
required to give bond only in those instances when an
executor is required to give bond.
G.S. 28-53 provides:
"Trustees appointed in any will admitted to probate in this State,
into whose hands assets come under the provisions of the will,
shall first qualify under the laws applicable to executors, and shall
file in the office of the clerk of the county where the will is pro-bated
inventories of the assets which come into his hands and
annual and final accounts thereof, such as are required of executors
and administrators. The power of the clerk to enforce the filing
and his duties in respect to audit and record shall be the same as
in such cases. This section shall not apply to the extent that any
will makes a different provision." (Emphasis added.)
30 ATTORNEY GENERAL OPINIONS [Vol.
Executors give bond only when required by law or by the terms of the
will. See G.S. 28-35 which requires an executor to give bond (1) when he
is a non-resident of the State, (2) when a man marries a woman who is
an executrix, and (3) when an executor not already under bond obtains
an order to sell real estate for the payment of debts. By reason of G.S.
28-53, a testamentary trustee is also required to give bond in these
instances.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
31 March 1970
Subject: Administration of Estates; Funeral Expenses; Payment as
Priority and General Creditor Claim
Requested by: Honorable Martha O. Comer
Clerk of Superior Court
Surry County
Question; After an administrator has paid the preferred claims in
the estate including the $600 amount for a funeral bill and
has paid other priority items such as the widow's allow-ance
and administration expenses, in distributing the re-mainder
to general creditors, should the balance of the
funeral bill be included as a general creditor claim ?
Conclusion: After an administrator has paid the preferred claims in
the estate including the $600 amount for a funeral bill and
has paid other priority items such as the widow's allow-ance
and administration expenses, the balance of the
funeral bill should be included as a general creditor claim
in distributing the remainder to general creditors.
In a letter of March 24 an opinion was requested of this Office as to
whether, when an administrator has paid the priority items in the estate
including the $600 funeral priority claim, the widow's year's allowance
and costs of administration, and when a small amount remains to be dis-tributed
and divided among the general creditors, whether the balance of
the funeral bill is to be included as a general creditor claim.
The answer is clearly that it is.
The practice in the State has by no means been uniform and at least prior
to 1967, many estates were so administered that only $600 of the funeral
bill was paid. However, in 1967, Chapter 1066 of the Session Laws further
clarified the second-class provisions of G.S. 28-105 to add the following:
"The preferential limitation herein granted shall be construed to
be only a limit with respect to preference of payment and shall
not be construed to be a limitation on reasonable funeral expenses
which may be incurred; nor shall the preferential limitation of
40] ATTORNEY GENERAL OPINIONS 31
payment in the amount of six hundred dollars ($600.00) be dimi-nished
by any Veterans Administration, social security or other
federal governmental benefits awarded to the estate of the deceased
or to his or her beneficiaries."
This 1967 amendment clarified the statute to clearly indicate that the
$600 funeral priority was just that and not a limit on funeral expenses
which could be allowed from the estate. This was further buttressed by
the 1969 amendment, codified as G.S. 28-107.1, which provides:
"Funeral expenses of a decedent shall be considered as a debt
of the estate of the decedent and the decedent's estate shall be
primarily liable therefor. The provisions of this section shall not
affect the application of G.S. 28-105."
Therefore in the estate described in the letter of March 24, the ad-ministrator's
contention as to the distribution would be correct.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
30 October 1968
Subject: Administration of Estates; Guardians, Appointment of
Requested by: Honorable Everitte Barbee
Clerk of Superior Court
Onslow County
Conclusion: A clerk of superior court may establish the relationship
of guardian and ward between two persons residing on a
federal reservation.
Your inquiry is as follows:
"Please advise me your opinion as to jurisdiction in matters of
appointing guardians for infants living in the housing area of
Camp Lejeune, North Carolina.
"The following is a specific case:
"Petition was filed by an individual without legal representation
for his appointment as guardian for his brother, a seventeen year
old minor living with him at Tarawa Terrace, which is located on
Camp Lejeune, a federal reservation. The petition declares the
mother and father of the infant deceased. The petitioner entered
military service from his home, Newark, New Jersey. The minor
has no income or other assets."
It is noted that the Camp Lejeune federal reservation is located within the
boundaries of Onslow County. I cannot believe that it is or was the intent
of the Legislature that a person living within the boundaries of Camp
Lejeune should have no way of being appointed a guardian or made a ward.
32 ATTORNEY GENERAL OPINIONS [VOL.
I am of the opinion that the Clerk of Superior Court of Onslow County
may establish the relationship of guardian and ward between two persons
residing on the Camp Lejeune, North Carolina, federal reservation, since
I find nothing in the law to the contrary.
T. W. Bruton, Attorney General
R. S. Weathers, Staff Attorney
17 September 1969
Subject: Administration of Estates; Guardians; Clerk's Duty on
Final Accounting by Guardian
Requested by: Honorable Lanie M. Hayes
Clerk of Superior Court, Warren County
Question: Does it fall within the authority and responsibility of the
clerk of superior court, under G.S. 33-41, to disapprove the
final account of a guardian because a final distribution
of the ward's estate was made by the guardian to the
ward's distributee rather than to the ward's administrator.
Conclusion: Yes.
The guardian of a deceased ward has tendered a final accounting for audit
and approval by the clerk of superior court. The account reveals a final
distribution by the guardian directly to the ward's distributee rather than
to an administrator of the ward's estate (no administrator having been
appointed).
In order to discover the extent of the clerk's authority and responsibility
under G.S. 33-41, dealing with the guardian's final account, an examination
of G.S. 33-39, dealing with the annual account of the guardian, is essential.
G.S. 33-39 empowers the clerk to examine, under oath, the guardian
". . . or any other person, concerning the receipts, disbursements or any
other matter relating to the estate." The statute then places upon the clerk
the responsibility for determining the propriety of the annual account by
stating that, ". . . if he approve the same, he must indorse his approval
thereon." Thus G.S. 33-39 seems clearly to contemplate an examination
by the clerk of all aspects of the guardian's accounting and not merely a
balancing of debits and credits. Due to the similarity of the subject
matter of G.S. 33-39, and G.S. 33-41, it would seem that the legislature
intended for the specific provisions of G.S. 33-39, as noted above, to be
applicable to G.S. 33-41 without the necessity of reiterating them in the
latter section. First Citizens Bank and Trust Co. v. Parker, 225 N.C. 480,
35 SE2d 489 (1945) ; see also Wiggins, Wills and Administration of
Estates in North Carolina, §323. .
Given the broad nature of the statutory language underlined above, it
would seem that a determination of the propriety of the final distribution
as made by the guardian would reasonably come within the scope of the
clerk's authority and responsibility in auditing the final account. The
40] ATTORNEY GENERAL OPINIONS 33
question whether a final distribution by the guardian directly to the dis-tributee
is proper can be answered by the application of settled legal
principles dealing with the termination of a guardianship by the death of
the ward. A guardianship is necessarily terminated by the death of the
ward and the right to the ward's property passes to the personal repre-sentative
of the decedent's estate subject to the guardian's right to retain
possession for the period of time required to make a final settlement of
the guardianship account. Winjum v. Jesten, 191 Minn. 294, 253 N.W.
881 (1934) ; Harrison v. Tonge, 67 Ga. App. 54, 57 (1942) ; see also 3 Lee,
N.C. Family Law §269. Upon the ward's death the relationship between
the guardian and the ward's personal administrator becomes that of
debtor and creditor. Files v. Buie, 131 Tex. 19, 112 S.W.2d 714 (1938);
see also, 39 C.J.S. 62, Guardian and Ward §41. Further, the guardianship
should be immediately terminated, the guardian discharged, and any unpaid
claims against the estate handled by the administrator. Files v. Buie,
131 Tex. 19, 112 S.W.2d 714 (1938) ; see also, 3 Lee, N.C. Family Law
§269. It appears that the law contemplates the appointment of an ad-ministrator
to wind up the aflFairs of the deceased ward rather than a
continuation of the guardianship for this purpose.
It is our opinion that the clerk should not approve the final account as
tendered by the guardian due to the improper distribution. An administrator
should be appointed and the decedent's estate distributed to the ad-ministrator.
Robert Morgan, Attorney General
J. A. Benoy,
Deputy Attorney General
Russell G. Walker, Jr.,
Staff Attorney
16 April 1969
Subject: Administration of Estates; Joint Bank Account; Power of
Clerk of Superior Court to Collect and Distribute Funds
Requested by: Honorable Louise S. Allen
Clerk of the Superior Court
Washington County
Question: A husband and wife have a joint survivorship account
payable to either or the survivor. The husband dies,
leaving no will. The bank releases one-half of the account
to the wife, the surviving spouse.
Can the bank legally release the other one-half of this
account to the clerk of the superior court if the amount
in the account is less than $1000 and no administrator has
been appointed, as set out under G.S. 28-68, to be dis-bursed
by the clerk under G.S. 28-68.2 ?
Conclusion: The bank in which the account is maintained may not pay
over to the clerk under the authority of G.S. 28-68 to be
disbursed in accordance with G.S. 28-68.2. This is pre-cluded
by the provisions of G.S. 41-2(b).
34 ATTORNEY GENERAL OPINIONS [VOL.
This opinion assumes from your inquiry dated April 11, 1969 that the
account in question falls within the purview of G.S. 41-2.1 dealing with
"Right of Survivorship in bank deposits created by written agreement."
Provided that the signature requirements of G.S. 41-2.1 have been met,
the disposal of the remaining one-half of the assets in the joint account
belong to the survivor subject to the claims of creditors of the deceased
and to certain governmental rights. G.S. 41-2. 1(b) (3).
Instructions contained in G.S. 41-2. 1(b) (4) require that the banking in-stitution
pay over to the legal representative of the deceased that portion
of the unwithdrawn deposit made subject to the rights of creditors.
The language of the statute clearly forecloses any payment for the
purposes you suggest.
Robert Morgan, Attorney General
Sidney S. Eagles, Jr.,
Revisor of Statutes
7 July 1969
Subject: Administration of Estates; Surety on Bond of Administra-tor,
Executor and Collector
Requested by: Honorable Charles M. Johnson
Clerk of Superior Court
Montgomery County
Questions: (1) When there are sureties to a bond given by an
executor, administrator or collector under the provisions of
G.S. 28-34, may the sureties be residents of a county in
i the State other than the county where the bond is given?
(2) Assuming the answer to Question 1 is "Yes", does
the surety justify before the clerk in his county of residence
or before the clerk where the executor, administrator or
collector qualifies ?
Conclusions: (1) Yes.
(2) Before the clerk where the executor, administrator or
collector qualifies.
G.S. 28-34 provides in part:
"Every executor from whom a bond is required by law, and every
administrator and collector, before letters are issued, must give a
bond payable to the State, with two or more sufficient sureties,
to be justified before and approved by the clerk, conditioned that
such executor, administrator or collector shall faithfully execute
the trust reposed in him and obey all lawful orders of the clerk or
other court touching the administration of the estate committed
to him. Where such bond is executed by personal sureties, the
penalty of such bond must be, at lease, double the value of all the
personal property of the deceased. . . ." (Emphasis added.)
40] ATTORNEY GENERAL OPINIONS 35
This statute does not restrict the place of residence of the surety to the
county of qualification of the administrator, etc. No other statute has been
found which makes such a restriction.
With respect to Question 2, the portion of G.S. 28-34 underlined above
contemplates, we believe, that the sureties must justify before the clerk
issuing the letters.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
6 October 1969
Subject: Administration of Estates; Widow's Allowance; Award
Where Deceased Not a North Carolina Resident
Requested by: Honorable Fred Proffitt
Clerk of Superior Court
Yancey County
Question: Where a decendent and his wife lived in another state until
his death and the widow then moved to North Carolina, is
the widow entitled to assignment of the widow's year's
allowance by a clerk of superior court in North Carolina?
Conclusion: Where a decedent and his wife lived in another state until
his death and the widow then moved to North Carolina, the
widow is not entitled to assignment of the widow's year's
allowance by a clerk of superior court in North Carolina.
In your letter of September 22 you indicate that the deceased and his
wife bought a home and established residence in the State of Virginia
and that on July 3, 1969, the husband died intestate, leaving his widow
the sole beneficiary of his estate. The widow has subsequently moved to
the State of North Carolina, bringing such personal effects as she and
the decedent shared during their marriage, including an automobile and
certain household items.
She has applied to your office for the widow's year's allowance. Under the
case law as it has been applied in North Carolina we are of the opinion
that she is not entitled to this year's allowance. G.S. 30-15 contains the
provisions relative to the surviving spouse's year's allowance. This section
was amended by the 1969 General Assembly to increase the allowance
from $1,000 to $2,000 and such amendment applies to estates of persons
dying on or after July 1, 1969 (see Chapter 14 of the 1969 Session Laws).
While the statute on its face does not require that either the deceased or
the spouse, or both, be North Carolina residents, our court has been pre-sented
several factual situations in which the allowance was denied be-cause
residency requirements were not met.
Where the deceased is a resident of another state, but the wife is a
resident of the State of North Carolina at death, the Supreme Court has
36 ATTORNEY GENERAL OPINIONS [VOL.
held that North Carolina could properly assign the year's allowance
(Jones V Layne, 144 N.C. 600, 57 S.E. 372 (1907)); however, where the
deceased and wife are both residents of another state at the date of death,
then North Carolina is without jurisdiction to assign the year's allowance.
This was decided in the cases of Medley v Dunlap, 90 N.C. 527 (1884) and
Simpson v Cureton, 97 N.C. 113, 2 S.E. 668 (1887). In the Simpson case
the court said at page 15:
"A subsequent removal to this state does not change her [the
widow's] relations toward the estate since they are fixed and her
rights to share therein are determined at the intestate's death,
and by the laws of his domicil."
The Sim,pson case would seem to be exactly on point and governs the
present factual situation. The court in Simpson suggested that the proper
procedure would be for the widow to apply in the state of her husband's
death for any allowance to which she might be entitled, for the court to
discover there that there were no assets and for her then to request a
comity ruling from the North Carolina court giving her the allowance to
which she was entitled under the law of the other state out of the assets
located in North Carolina.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
18 September 1969 ' '^
Subject: Administration of Estates; Wills; Holographic Wills; Exe-cutors
and Administrators
Requested by: Honorable Robert Miller ^
Clerk of Superior Court
Stokes County
Questions: (1) In the event that the handwriting of the deceased
can be proved and there are no defects in other respects, it
is sufficient for the maker of a holographic will to sign or
write his name in the body of the will and have this
legally considered his signature to the will ?
(2) In a valid holographic will, is the widow of the de-ceased
testator entitled to serve without bond under the
authority of the statement in the will that she is appointed
"administrator ?
"
(3) Is there any significance in the naming in a holo-graphic
will of a son as "administrator" after the death
of the wife?
Conclusions: (1) Where the handwriting of a testator in a holographic
will can be proved and there are no defects in other re-spects,
it is sufficient signature for the testator in a holo-graphic
will to sign or write his name in his own hand-writing
in the body of the will.
40] ATTORNEY GENERAL OPINIONS 37
(2) In a valid holographic will, the widow of the testator
is entitled to serve without bond where the testator in his
will appointed his wife administrator and the will is silent
as to bond.
(3) The significance of a son of a testator being appointed
administrator at the death of the testator's spouse who
was named administrator will vary according to the status
of the administration of the estate at the death of the first
named administrator; if completed, there is no action re-quired
but if incomplete then he stands as the testator's
nominee as successor administrator de bonis non cum
testamento annexo.
The requisites of a holographic will in North Carolina are established by
G.S. 31-3.4:
"§31-3.4. Holographic will.—(a) A holographic will is a will
(1) Written entirely in the handwriting of the testator but
when all the words appearing on a paper in the handwriting
of the testator are suflficient to constitute a valid holo-graphic
will, the fact that other words or printed matter
appear thereon not in the handwriting of the testator, and
not affecting the meaning of the words in such hand-writing,
shall not affect the validity of the will, and
(2) Subscribed by the testator, or with his name written in
or on the will in his own handivriting , and
(3) Found after the testator's death among his valuable papers
or effects, or in a safe deposit box or other safe place
^ where it was deposited by him or under his authority, or
in the possession or custody of some person with whom, or
some firm or corporation with which, it was deposited by
him or under his authority for safekeeping.
(b) No attesting witness to a holographic will is required."
The underlined portion of G.S. 31-3.4 removes any doubt as to the efficacy
of a holographic testator signing the will by writing his name within the
body or text of his holographic will. See 1 Wiggins, Wills and Administra-tion
of Estates §§18, 20; In re Will of Goodman, 229 N.C. 444, 50 S.E.2d 34
(1948) ; In re Will of Williams, 234 N.C. 228, 66 S.E.2d 902 (1951).
The manner of probate of a holographic will is set out in G.S. 31-18.2
which is set out below:
"§31-18.2. Manner of probate of holographic will.—A holographic
will may be probated only in the following manner:
(1) Upon the testimony of at least three competent witnesses
that they believe that the will is written entirely in the hand-writing
of the person whose will it purports to be, and that
38 ATTORNEY GENERAL OPINIONS [VOL.
the name of the testator as written in or on, or subscribed
to, the will is in the handwriting of the person whose will it
purports to be; and
(2) Upon the testimony of one witness who may, but need not
be, one of the witnesses referred to in subdivision (1) of
this section to a statement of facts showing that the will was
found after the testator's death as required by G. S. 31-3.4."
The language of G.S. 28-34, "Every executor from whom a bond is required
by law, and every administrator and collector, before letters are issued,
must give a bond . . .", does not require bond of the holographic testator's
spouse whom he designated as executrix in his holographic will
even though he named her "Adminster" [sicl. The choice of titles selected
by the testator for the person nominated by him to pay debts of the
estate and distribute his property does not affect what title they bear in
contemplation of the statutes. Wiggins, Wills and Administration of
Estates, says at Section 215:
"In order that creditors may be paid and the estate distributed in
accordance with the wishes of the owner or in accordance with the
intestacy laws, it is necessary to appoint someone to represent the
deceased. When nominated by the testator's will, the representative
is known as the executor. If the decendent died intestate, his
representative is known as the administrator." (Emphasis added.)
Thus, for purposes of the bond requirements imposed by G.S. 28-34, the
holographic testator's wife is his nominee as "executrix", not "administra-tor".
"Unless required by the terms of the will or unless an order is
obtained to sell real property for the payment of debts, a domi-ciliary
executor is not required to give a bond. However, upon the
petition of any creditor or any other person interested in the
estate, when a man marries a woman who is an executrix, the
husband may be required to give a bond." 1 Wiggins, Wills and
Administration of Estates, §231, pp. 698-9. See G.S. 28-34, -35.
In the instant case, the son named as ". . . adminstor [sic'\ over the estate
at Claudie's death" is the testator's nominee to succeed the testator's
wife. If she qualifies, is appointed and dies, the son stands as the de-cendent's
nominee for administrator de bonis non cum testamento annexo.
He is entitled to the same treatment he would have been entitled to if he
had been named as the alternate or successor "executor" by the testator
instead of having been named "administrator." If administration had been
wound up at the time of the testator's widow's death, the appointment of
the son would be of no significance.
* Robert Morgan, Attorney General
Sidney S. Eagles,
Revisor of Statutes
40] ATTORNEY GENERAL OPINIONS 39
ADMINISTRATIVE LAW
15 March 1969
Subject: Administrative Law; Employment Security Act; Persons
Other Than Members of State Bar Prohibited from Prac-ticing
Law
Requested by: Mr. D. G. Ball
Chief Counsel
Employment Security Commission
Question: Can a partner represent the partnership as an employing
unit in matters and hearings before the Employment
Security Commission, although the person involved in the
representation is not an attorney? Can a corporation
through its officers, foremen, personnel director, overseer,
superintendent, etc., represent the corporation in matters
before the Employment Security Commission even though
none of the individuals described is an attorney ?
Conclusion: Under G.S. 84-4 and G.S. 84-5 any person appearing before
the Employment Security Commission as an attorney or
counsellor at law must be a member of the Bar of the
State of North Carolina, and corporations must appear
- ' before said Commission through their duly authorized at-torney.
The questions submitted by the Chief Counsel of the Employment Security
Commission seem to result from a consideration of the case of State v.
Pledger, 257 N.C. 634. This case resulted from the practices of a
corporation engaged in the sale and construction of homes. An agent of
the corporation, not being an attorney, prepared deeds of trust for the
corporation by the use of printed forms in which he filled in the blank
spaces, and the same agent supei vised the execution of the deeds of trust,
acknowledgment and recordation of the deeds of trust. The Court said
that the practice of law embraces the preparation of legal documents and
contracts by which legal rights are secured. It further said it was not the
purpose and intent of G.S. 84-4 to make unlawful all activities of lay
persons which come within the general definition of practicing law, which
is defined in G.S. 84-2.1, and then the Court said:
"A person, firm or corporation having a primary interest, not
merely an incidental interest, in a transaction, may prepare legal
documents necessary to the furtherance and completion of the
transaction without violating G.S. 84-4. The statute was not en-acted
for the purpose of conferring upon the legal profession an
absolute monopoly in the preparation of legal documents; its
purpose is for the better security of the people against incom-petency
and dishonesty in an area of activity aff'ecting general
welfare."
40 ATTORNEY GENERAL OPINIONS [VOL.
This decision, it would seem, relates exclusively to the preparation of legal
documents and does not reach into the field of appearances before quasi-judicial
commissions and courts. It is true that in the Pledger case it is
said in substance that a person involved in litigation, though not a lawyer,
may represent himself in any action or proceeding in a tribunal or court,
even in the Supreme Court. This right to appear pro se is an old and well
established right and apparently has a constitutional basis but the practic-ing
of law within the prohibitions relates to those who customarily or
habitually hold themselves out to the public as lawyers and excludes the
right of one to represent himself.
Inasmuch as G.S. 84-4 requires that any person who appears before the
Employment Security Commission must be a member of the Bar of the
State you should observe that statute, and, therefore, a partner cannot
represent the employing unit in matters and hearings before the Employ-ment
Security Commission if he is not an attorney. Likewise a corporation
may not appear by its agents before the Employment Security Commission,
and this is directly prohibited as to your Commission by G.S. 84-5.
Robert Morgan, Attorney General
Ralph Moody,
Deputy Attorney General
18 March 1970
Subject: Administrative Law; Hearings Before State Personnel
Board; Evidence; Applicability of G.S. 143-317
Requested by: Mr. Claude E. Caldwell, Director
State Personnel Department
Question: Does G.S. 143-317, making superior court rules of evidence
applicable to hearings before certain State agencies, apply
to a hearing before the State Personnel Board relating to
the dismissal of a governmental employee who is subject
to the State Personnel Act?
Conclusion: G.S. 143-317, which makes superior court rules of evidence
applicable to hearings before certain State agencies, does
apply to a hearing before the State Personnel Board re-lating
to the dismissal of a governmental employee who is
subject to the State Personnel Act.
The facts in the question raised here involve a female employee, subject
to the State Personnel Act, who was dismissed from employment. Upon
her dismissal, she appealed to the State Personnel Board in accordance
with the rules and regulations adopted by the State Personnel Board,
pursuant to G.S. 126-4(9) and G.S. 126-6. The specific question raised here
is whether or not G.S. 143-317, which deals with rules of evidence in ad-ministrative
proceedings before State agencies, is applicable at a hearing
when an employee, subject to the State Personnel Act, is dismissed from
work and appeals that dismissal to the State Personnel Board.
40] ATTORNEY GENERAL OPINIONS 41
In this regard, G.S. 143-317(3) provides as follows:
" 'Proceeding' shall mean any proceeding, by whatever name called,
before an administrative agency of the State, wherein the legal
rights, duties, or privileges of specific parties are required by law
or by constitutional right to be determined after an opportunity
for agency hearing." [Emphasis added.]
It is evident that an appeal hearing before the State Personnel Board is a
proceeding before an administrative agency of the State. Appeal hearings
before the State Personnel Board and the rendering of advisory opinions
by that Board are guaranteed for all those persons subject to the State
Personnel Act as authorized by G.S. 126-6 and as specifically set forth in
Paragraphs 1 and 2 of Article X, Section 4 of policies adopted by the
North Carolina Merit System Council.
It is clearly a privilege within the meaning of G.S. 143-317(3) for a person
subject to the State Personnel Act to have the right to an appeal hearing
before the State Personnel Board and further to have that same Board
determine the legitimacy of the individual's dismissal by the process of
issuing an advisory opinion or recommendation with respect thereto.
It is, therefore, the opinion of this office that G.S. 143-317 does apply to
appeal hearings before the North Carolina State Personnel Board when-ever
a person subject to the State Personnel Act seeks to invoke his right
to that appeal hearing.
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
James L. Blackburn, Staff Attorney
14 January 1970
Subject: Administrative Law; Rules of Civil Procedure; Inapplica-bility
to Administrative Hearings; Appointment of Guard-ian
Ad Litem by Industrial Commission
Requested by: Mr. William H. Stephenson, Secretary
North Carolina Industrial Commission
Questions: (1) Does the North Carolina Industrial Commission have
the authority to appoint a guardian ad litem in a tort
claims action or workmen's compensation case?
(2) What powers would such a guardian ad item have?
Conclusions: (1) The North Carolina Industrial Commission has the
authority to appoint a guardian ad litem in a tort claims
action or workmen's compensation case.
(2) The guardian ad litem has such powers and duties as
are listed in Rule 17 of the Rules of Civil Procedure which
are substantially similar to those of the next friend.
'42 . / ATTORNEY GENERAL OPINIONS [VOL.
/
When the new Rules of Civil Procedure were enacted by the 1967 General
Assembly (c. 954, 1967 Session Laws), G.S. 1-64, which provided for the
appointment of a next friend to prosecute actions on behalf of incompetents,
was specifically repealed. It was applicable, by its terms, to "actions and
special proceedings when any of the parties plaintiff are infants . . . ."
Since G.S. 143-291 constitutes the Industrial Commission a court for hear-ing
tort claims against State agencies, it was rightfully concluded that the
Commission had authority under §1-64 to appoint a next friend. Likewise,
because of the special provisions of G.S. 97-48 dealing with minor claimants
in workmen's compensation cases, the Commission has been justified in
appointing a next friend in certain cases where the interest of the minor
would be better protected. See Houser v Bonsai and Company, 149 N.C.
51, 62 S.E. 776 (1908), where it was held that a justice of the peace had
authority to appoint a next friend.
G.S. 1-64 was specifically repealed as mentioned above effective January 1,
1970. Substituted in its place was Rule 17 of the Rules of Civil Procedure
(G.S. lA-1). Rule 1 provides as to the scope of the new Rules:
These Rules shall govern the procedure in the superior and
district courts of the State of North Carolina in all actions and
proceedings of a civil nature except when a differing procedure
is prescribed by statute.
Thus, the applicability of the Rules is restricted to our district and
superior courts. The comments of Professor Sizemore in his article, "General
Scope and Philosophy of the New Rules", 5 Wake Forest Intramural Law
Review 1 at page 7, support this conclusion. The Federal Rules of Civil
Procedure, Rule 1, provide that the scope of those rules is confined to
federal district courts. The practice with federal agencies has been to
grant specific powers (such as the power to take depositions) in the statutes
applicable to the agencies.
The philosophy of the new Rules is clear. The General Assembly has
brought together in a cohesive whole the rules applicable to civil actions.
The Comments to Rule 1 state ". . . In general it can be said that to the
extent a specialized procedure has heretofore governed, it will continue to
do so." We are dealing here, we think, with a legislative oversight.
Certainly, it was not intended that incompetents bring actions against the
State or their employers in their own names—or not be able to bring them
at all.
With the language contained in G.S. 97-48, we are of the opinion that the
Commission should continue to appoint a representative of a minor's
interest and suggest that this procedure conform to the Rules to the
extent that the person be denominated a guardian ad litem.
And since G.S. 143-291 contemplates that not all actions will be brought
by, but merely on behalf of, real parties in interest when it provides that
the Commission will determine the issue of contributory negligence "on the
part of the claimant or the person in whose behalf the claim is asserted",
40] ATTORNEY GENERAL OPINIONS 43
since the Commission is constituted a court under that statute, and since
the State is to be held liable under circumstances where a private person
would be liable, the Commission should exercise authority to appoint a
guardian of the interests of minors in tort suits.
Rule 17 provides specific powers and duties of the guardian ad litem. It
does not mention receipt of funds, however, and we are of the opinion that
a guardian ad litem for an incompetent plaintiff stands in the place of
the former office of next friend—without power to receive funds for the
incompetent.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Staff Attorney
AGRICULTURE
18 December 1969
Subject: Agriculture; Chickens; Handlers Act Not Applicable to
Broiler Chicken "Grow Out Contracts"
Requested by: Mr. Curtis F. Tarleton, Director
Markets Division, Department of Agriculture
Question: Are "grow out contracts" for broiler chickens subject to
the provisions of Article 44 (Unfair Practices by Handlers
of Farm Products) of Chapter 106 of the General Statutes?
Conclusion: No, provided the chickens never are owned by the producer.
In a letter of December 12, Mr. Tarleton described the "grow out" opera-tion:
"Virtually all of the broilers produced in the State are grown
under some type of contract, either written or verbal. The con-tractor
is usually a processor or feed manufacturer and in several
instances is a combination of the two. As a general rule, the
contractor in dealing with individual producers furnishes the baby
chicks, the feed for raising them, any medications needed to con-trol
and prevent disease and, in most instances, provides the
services of a trained field man to advise individual growers on
production problems.
"The contract between the two parties usually calls for paying the
grower so much per bird at the time they are marketed. This, at
present, is somewhere around 7 cents per bird and is payment for
the grower's labor and use of his facilities. In most instances, the
contracts are geared to a feed conversion ratio and, in many in-stances,
the amount paid the grower is determined to some degree
by the live broiler quotation released daily by our division's market
news service. The crucial fact here is that the broilers are never
owned by the producer.
44 ATTORNEY GENERAL OPINIONS [VOL.
"It is apparent from reading the 'Handlers Act' (G.S. 106-496
thru 106-501) that a 'handler' is one who either buys from a pro-ducer,
on credit, farm products to be resold at which time the
producer is to be paid, or takes possession of farm products as
agent for the producer, farm products to sell on a commission
basis. The Act requires a handler to procure a bond '. . . payable
to the State in favor of every contract producer or consignor of
farm products, and shall be continued upon compliance with all
the provisions of this article, and the faithful fulfillment of all
contracts, and for the faithful accounting for and handling of
produce by such handler, and for the payment to the producer of
the net proceeds of all consignments and sales."
Therefore, here, where the "contractor" always owns the broilers, the
"contractor" never becomes a "handler".
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
AIRPORT AUTHORITY
23 September 1969
Subject: Airport Authority; Indebtedness; Acquisition of Real Estate
for Site; Execution of Note and Deed of Trust; No
Authority Without Vote of People
Requested by: Mr. Jule McMichael
Rockingham County Attorney
Question: May the Rockingham County Airport Authority accept a
deed of real estate for airport purposes and execute a
note and deed of trust to the companies financing the
purchase?
Conclusion: An airport authority does not have authority to incur
indebtedness without approval by a vote of the people.
Chapter 622 of the Session Laws of 1963 authorized Rockingham County
to establish an airport authority empowered to acquire lands, construct
and operate an airport, and vesting in the authority all powers contained
in Chapter 63 of the General Statutes.
The statutes, both local and general, convey ample authority to acquire
property for airport purposes. The acquisition of property for airport
purposes is for a public purpose within the provisions of the State Con-stitution.
This was so held in Vance County v. Royster, 271 N.C. 53. That
same Supreme Court decision, however, pointed out that a local govern-mental
unit can incur indebtedness without approval of a majority of
voters only for necessary expenses, and that acquisition and operation of
40] ATTORNEY GENERAL OPINIONS 45
an airport is not a necessary expense in the constitutional sense. Mr.
Justice Lake, writing for the court, at pages 63-64, stated in part as
follows:
"It is not for the court to determine the wisdom of a decision to
contract a debt for a county or a city, but it is the duty of the
court to determine whether the proposed indebtedness is for a
'necessary expense' within the meaning of the above provision of
the Constitution. Sing v. Charlotte, 213 N.C. 60, 195 S.E. 271;
Palmer v. Haywood County, 212 N.C. 284, 193 S.E. 668, 113 A.L.R.
1195; Starmount Co. v. Hamilton Lakes, 205 N.C. 514, 171 S.E.
909; Storm v. Wrightsville Beach, 189 N.C. 679, 128 S.E. 17.
Pursuant to this authority and duty, this court has determined
that the construction of a public airport is not a 'necessary ex-pense'
in that sense. Airport Authority v. Johnson, supra; Sing v.
Charlotte, supra. Thus, a county or city may not contract a debt
or pledge its faith for the construction or operation of such an
airport without first submitting the question to a vote of the
people of such county or city."
Robert Morgan, Attorney General
Harry W. McGalliard,
Deputy Attorney General
BUSINESS & COMMERCE
28 March 1969
Subject: Business & Commerce; "Cooperative"; Use of Word in
Assumed Name
Requested by: Mr. W. E. Lane, In Charge, Transportation & Cooperatives
Department of Agriculture
Question: Does the use of the word "cooperative" in the assumed
name of an unincorporated association, which name is filed
with the Register of Deeds pursuant to G.S. 66-68 et seq.,
violate the provisions of G.S. 54-139 (b) ?
Conclusion: The use of the word "cooperative" in the assumed name
of an unincorporated association or group not organized
pursuant to Subchapter V of Chapter 54 is a violation of
of G.S. 54-139(b).
In a letter and telephone conversation of March 24, 1969, the facts indicate
that several groups of persons, not incorporated under the provisions of
Subchapter V of Chapter 54, have filed an assumed name with various
registrars of deeds, pursuant to G.S. 66-68 et seq., which assumed name
contains the word "co-operative".
Subchapter V of Chapter 54 provides a statutory method for producers
of agricultural products to form a corporation to orderly produce and
46 ATTORNEY GENERAL OPINIONS [VOL.
market their products. The subchapter has been held constitutional.
Tobacco Growers Co-Op Association v Jones, 185 N.C. 265, 117 S.E. 174
(1923).
G.S. 54-139 provides:
"Domestication of foreign co-operative corporations ; limitation on
use of word 'co-operative'.—(a) A foreign corporation that can
qualify as an association, as defined in G.S. 54-130(2) (b) (1) and
(2), may, under the provisions of article 8, chapter 55A, if it be
a nonstock corporation, or under the provisions of article 10,
chapter 55, if it be a stock corporation, be authorized to transact
business in this State.
"(b) No person other than as association organized under this
subchapter, or a foreign corporation domesticated pursuant to
subsection (a) of this section, or an electric or telephone member-ship
corporation domesticated pursuant to G.S. 117-28, shall be
entitled to organize, domesticate, or transact business in this State
if the corporate or other business name or title of such person
contains the word 'co-operative'."
The "co-operatives" in question do not qualify as one of the exceptions
listed in G.S. 54-139 (b). Therefore, the use of the word "co-operative" in
their assumed name is in violation of G.S. 54-139.
Robert Morgan, Attorney General
Millard R. Rich, Jr.,
Assistant Attorney General
26 January 1970
Subject: Business & Commerce; Foreign Corporations; Professional
Corporation Act; Domestication of Foreign Professional
Corporation
Requested by: Mr. Joseph G. Maddrey, Corporation Attorney
Office of Secretary of State
Questions: (1) Can a foreign professional corporation, in good
standing in its state of incorporation, domesticate in
North Carolina under (a) Chapter 55 (Business Corporation
Act), and (b) Chapter 55B (The Professional Corporation
Act) ?
(2) Does the licensing board of this State or the state of
incorporation of a foreign professional corporation certify
the facts by G.S. 55B-4(4) ?
Conclusions: (1) (a) Yes.
(b) No.
, (2) The licensing board of this State.
40] ATTORNEY GENERAL OPINIONS 47
jPrior to the enactment of Chapter 718, 1969 Session Laws (The Profes-sional
Corporation Act), there was no provision in the North Carolina
General Statutes for the incorporation of persons who engaged in certain
professions. This Act permits architects, attorneys, public accountants,
physicians, dentists, optometrists, osteopaths, chiropractors, veterinarians,
podiatrists, practicing psychologists and engineering and land surveyors
to incorporate and practice such professions provided certain other statu-tory
requirements are met.
Section 3 (G.S. 55B-3) of The Professional Corporation Act provides:
"The Business Corporation Act shall be applicable to such pro-fessional
corporations, including their organization, and profes-sional
corporations shall enjoy the powers and privileges and shall
be subject to the duties, restrictions and liabilities of other corpora-tions,
except insofar as the same may be limited or enlarged by
this chapter. If any provision of this chapter conflicts with the
provisions of the Business Corporation Act, the provisions of this
chapter shall prevail."
There is no specific provision in the Professional Corporation Act for the
domestication of foreign professional corporations. T